Bitcoin Surges Past $117,000 Before Upcoming Fed Rate Decision

Cryptocurrency

Summary:

The United States Federal Reserve is anticipated to lower interest rates today, which has already been factored into the cryptocurrency market with a 25-basis-point reduction.

The United States Federal Reserve is anticipated to lower interest rates today, which has already been factored into the cryptocurrency market with a 25-basis-point reduction. Investors are eagerly anticipating the interest rate announcement at 21:00 Turkish Standard Time (TSI) and the subsequent press conference by Fed Chairman Jerome Powell at 21:30 TSI. According to CME FedWatch data, there is a 96% likelihood of a quarter-point rate cut. Ahead of this decision, Bitcoin (BTC) has surged past the $117,000 mark, approaching its highest level in a month.

Investor Focus on Powell’s Statements More Than Rate Decision

Juan Leon, investment strategist at Bitwise, suggests that the markets have already absorbed the expectation of a rate cut, indicating that the real impact will emerge from Powell’s remarks after the meeting. While CME FedWatch suggests a high probability of a rate cut, the possibility of the Fed surprising markets with a significant 0.50-point reduction remains on the table.

Weakness in the United States’ employment data has reinforced the prospect of a rate cut. Although the Fed has held rates steady through the last five meetings, it last enacted a 25-basis-point reduction in December of the previous year. Powell has consistently emphasized that inflation remains above the 2% target, and decisions are driven by economic data. Consequently, forthcoming statements will be pivotal in determining the direction of both cryptocurrency and traditional markets.

Fed Activity Sparks Movement in the Crypto Market

In the last 24 hours, Bitcoin has gained 1.17%, reaching up to $117,300. Ethereum (ETH) has risen by 0.93%, XRP by 1.30%, and Solana (SOL) is up by nearly 0.5%. Notably, Solana has made significant progress, appreciating nearly 10% over the past week, linked to the expansion of network treasuries in the altcoin sector.

The broader cryptocurrency market has experienced an upswing, consistent with the strengthening anticipation of a rate cut. A surprising 50-basis-point reduction could potentially trigger even stronger market movements. Powell’s forthcoming messages are expected to provide insights into the Fed’s trajectory for the rest of the year.

Source: CryptoSlate

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Forex

Economic

USD: Bumpy ride on the Fed roller coaster

It's FOMC day, and the Fed is widely expected to cut rates by 25bp. There are many moving parts to today's meeting, but let's go through a few of them. First at 20CET, we'll get the FOMC statement and an update of the Summary of Economic Projections (SEP), which includes the Dot Plots on median expectations for the Fed Funds rate over 2025, 2026, 2027 and the longer term. In the statement, beyond the 25bp cut, we'll be looking for a phrase like 'In considering additional adjustments to the target range' which the Fed used last year to signal a succession of cuts. The alternative: 'In considering the extent and timing of additional adjustments', would reflect hesitancy and lift short-dated rates and the dollar. The statement will also show the voting pattern, which could be something like eight for a 25bp cut, three for 50bp (Waller, Bowman, Miran) and perhaps one for unchanged rates (Schmid).

On the Dot Plots, the majority of economists think the median 2025 Dot Plot will continue to see just two cuts – i.e. policy ending the year in the 3.75-4.00% target range from 4.25-4.50% now. This could be a problem for the short end of the US curve, which prices 70bp of rate cuts. Expectations are that the 2026 Dot will add one extra cut to the June projection, so it would shift to 3.25-3.50%, while the 2027 Dot would also shift by one cut to 3.00-3.25%. In short, the Dot Plot could show a slower trajectory of getting to 3.00-3.25% compared to current pricing of that zone being hit late next summer.

After the statement/SEP at 20:30CET, we'll get Chair Jerome Powell's press conference. A market widely bearish on the dollar will want to hear greater concerns over the jobs market and less concern over tariff-induced inflation. He'll probably highlight that monetary policy can become slightly less restrictive, but stop short of suggesting any urgency to cut rates more deeply.

The dollar is going into this meeting on the soft side as the Fed prepares to restart its easing cycle. There are some upside event risks to the dollar from the Dot Plot – and perhaps from Powell's press conference too. Nonetheless, today should confirm that the Fed is embarking on a 125bp easing cycle. We would see any upside spike in the dollar as temporary and corrective – eg, DXY sellers could re-emerge in the 97.50/98.00 area. And we doubt a slightly more gradual easing cycle than the market expects needs to trigger a sharp re-pricing of risk assets.Alternatively, if Chair Powell throws in the towel on the inflation threat and wholly focuses on the need to prevent job losses with precautionary rate cuts, DXY can just break down towards a near-term target at 95.

EUR: Range break-out

EUR/USD has broken to the topside of a 10-week trading range, and it looks hard to resist the move. Two-year EUR:USD swap rate differentials have narrowed around 50bp in favour of the euro over those 10 weeks. As above, tonight's FOMC will be the dominant theme now, and we'd expect good demand for EUR/USD on any corrective dip to the 1.1750/1780 area during Powell's press conference. Seasonality now builds against the dollar – especially in November and into December – and 1.1910 looks like the final resistance level before 1.20 is hit.

For today's European session, look out for the ECB's release of its wage tracker index. The last release showed wage agreements down at 1.7% in 1Q26 from 4.6%in 1Q25 and the ECB will be interested in whether this has picked back up to 2.0% given improving business optimism this summer. For reference, investors currently price just 11bp of ECB easing by next summer. We think the easing cycle is over.

GBP: Fiscal policy remains the weakest link

The rug was pulled from under the sterling rally yesterday when the Financial Times reported that the Office for Budget Responsibility had indeed lowered its productivity forecasts for the UK economy. This will deprive Chancellor Rachel Reeves of expected revenues and potentially add £9bn to the fiscal gap she faces in November's budget.The negative event risk of November's budget is offset by the recently turned hawkish Bank of England. Sterling has sold off this morning on a slightly sub-consensus August CPI services reading at 4.7%, even if the BoE's preferred measure of services inflation has remained unchanged at 4.2% YoY.

We think the dollar will be the dominant FX theme, and GBP/USD should find support near 1.3600 before being dragged above 1.37. Sterling's fiscal vulnerability looks more like a story for EUR/GBP. Yet a still hawkish BoE (see tomorrow's event risk) may mean EUR/GBP continues to trade in a 0.8650-0.8715 range.

CAD: Today’s Bank of Canada cut not the last

Markets are fully pricing in a 25bp rate cut by the Bank of Canada today. As discussed in our preview, that is also our call. Yesterday, Canada reported headline inflation at 1.9%, below the 2.0% consensus, while core measures were unchanged at 3.0/3.1% as expected. It’s an inflation picture that isn’t concerning enough to prevent a resumption of rate cuts, given the backdrop of job market deterioration. Unemployment has reached 7.1%, the highest since 2021, the economy contracted by -1.6% QoQ annualised in the second quarter, and activity surveys point to further downside risks.

We expect another cut by the BoC in December, which is now also almost fully priced in. The BoC has kept its guidance very open-ended, and we doubt policymakers want to push back against easing bets at this meeting. The reaction in CAD today may not be that significant as markets retain strong data dependence for any material adjustments in rate expectations. We retain a bearish bias on CAD against most of the G10, although USD weakness can keep USD/CAD stable or slightly offered around 1.37.

Source: ING

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Gerik

Economic

Monetary Policy in Focus as Fed Readies Rate Cut

After prolonged speculation driven by volatile economic data, the Federal Reserve is set to reveal its monetary policy direction in a decision that investors have been anticipating for weeks. Markets have already priced in a near-certain rate cut of 25 basis points, bringing the federal funds target range to 4.00%-4.25%. However, the larger question dominating investor attention is how much additional easing the Fed intends to deliver through 2026.

Expectations currently lean toward another 150 basis points of cuts by the end of next year. This anticipated trajectory has already shaped global asset prices. The Fed's forward guidance, especially the updated "dot plot" projections and comments from Chair Jerome Powell, will be critical in confirming or recalibrating market assumptions.

Global Asset Movements Reflect Fed Anticipation

Investor sentiment is clearly positioned for a more accommodative monetary environment. Equities and gold prices have reached record levels, while the U.S. dollar has weakened significantly, reaching its lowest level against the euro in four years. This asset reallocation reflects a perceived causal relationship between anticipated lower interest rates and risk-seeking behavior among investors.

U.S. Treasury yields have fallen in response to the expected rate path, further reinforcing the inverse correlation between bond prices and interest rate outlooks. The equity rally, led by speculative bets on continued monetary support, carries potential for increased volatility if the Fed signals fewer cuts than priced in.

Trump’s Influence and Political Intrusions into Central Bank Affairs

President Trump’s influence remains a notable backdrop. His public pressure for easier policy, including veiled threats against Fed independence, contributes to the perception of a dovish shift. Despite some setbacks such as a court blocking his attempt to remove Fed Governor Lisa Cook Trump has successfully placed Stephen Miran, a key economic advisor, onto the Fed board.

This political dynamic suggests a potential shift in internal Fed deliberations, although the central bank has thus far maintained its institutional autonomy. Still, markets may interpret these changes as signaling a structural tilt toward looser policy over time.

Canada, Japan, and Global Spillovers

The Federal Reserve is not the only central bank facing critical decisions. The Bank of Canada is also expected to cut rates, as labor market strains and ongoing trade disruptions intensify. Meanwhile, Japan’s economic challenges deepen, with August marking the fourth consecutive monthly decline in exports, a trend linked to the broad-based tariff regime introduced under Trump’s presidency.

These developments suggest a broad global context in which central banks are increasingly leaning toward stimulus, either in response to local economic weaknesses or international trade uncertainty. This convergence of easing monetary policies underscores the interconnected nature of financial responses to geopolitical decisions.

Market Sentiment and Day’s Outlook

In Asia, early caution gave way to optimism, with the Hang Seng Index climbing 1.4%, signaling upbeat investor expectations. European markets are projected to open higher, while U.S. futures remain relatively flat, likely awaiting the Fed’s clarity before committing to directional bets.

Meanwhile, key economic releases including U.S. housing starts, U.K. and euro zone consumer price indexes, and Germany’s long-term bond auctions will feed into broader inflation expectations and monetary outlooks.

In the corporate world, attention also turns to Meta’s Connect conference and the IPOs of StubHub and WaterBridge Infrastructure, which may inject additional sentiment drivers into equity markets.

Today’s Fed decision carries significant weight in shaping the trajectory of both U.S. and global markets. The anticipated rate cut is largely a formality, but the Fed’s forward guidance, projections, and tone will determine whether markets continue their upward momentum or correct in response to more restrained policy. As other central banks follow suit and political pressure mounts, the balance between inflation control, labor market stability, and growth stimulus remains precarious. All eyes now turn to Jerome Powell and the dot plot for the next phase of monetary strategy.

Source: Reuters

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Economic

Renewed Agenda with Enhanced Institutional Support

President Donald Trump's 2025 call to allow semiannual reporting for U.S.-listed companies is gaining renewed momentum after having stalled during his previous administration. Unlike the earlier push, this iteration is bolstered by a White House that is exercising increased oversight over the Securities and Exchange Commission (SEC), including directly influencing its regulatory agenda. SEC Chair Paul Atkins, a free-market advocate, is now collaborating closely with the administration, making this regulatory shift more likely to materialize.

The current effort aligns with broader deregulatory ambitions. Under Trump's influence, the SEC has already taken steps to streamline policy in areas such as cryptocurrency and workforce reductions. The SEC’s newly published agenda includes a proposal tentatively scheduled for April, centered on "rationalizing" corporate disclosures. This sets the stage for a formal rulemaking process, involving impact assessments on competition, capital formation, and market efficiency, followed by public consultation.

Unlike the Trump 1.0 era, which saw the idea shelved due to the COVID-19 pandemic and other competing priorities, Trump 2.0 enjoys better structural conditions: a cooperative SEC chair, a Congress more amenable to deregulatory reforms, and a conservative judiciary likely to support such changes. According to James Angel of Georgetown University, the administration's current posture is "bolder" and more decisive in advancing favorable regulatory outcomes.

Business Interests and Arguments for Reform

Business lobbying groups such as the U.S. Chamber of Commerce and the Business Roundtable have consistently argued that quarterly reporting imposes excessive compliance burdens, which can distract executives from long-term strategy. They advocate for “modernized” disclosure frameworks to reduce costs and simplify investor focus on essential metrics. Bill Hulse of the U.S. Chamber emphasized that updated rules could simultaneously benefit companies and clarify data for investors.

Despite corporate support, resistance from investor communities remains. Institutional investors, such as the Council of Institutional Investors, argue that quarterly reports are essential for transparency and informed decision-making. They fear that a six-month reporting cycle would limit access to timely financial data, making it harder to assess corporate performance and increasing the likelihood of surprises that could trigger price volatility.

This concern reflects a causative relationship: less frequent reporting may reduce the information available for market participants, potentially widening the range of market expectations and increasing price swings when earnings are finally disclosed. As Andrew Horowitz, an investment advisor, points out, the longer interval between reports might create more dramatic reactions, especially if earnings diverge significantly from forecasts.

However, there is a parallel trend among sustainability-focused investors who support long-term thinking in corporate governance. Some cautiously back the shift, suggesting it could free managers from the short-term pressures often reinforced by quarterly earnings targets.

Outlook and Political Willpower

Brian Gardner from Stifel predicts that a regulatory proposal could emerge before the end of the year, suggesting a faster timeline than in previous years. While investor opposition could temper some of the momentum, the political backing from the White House and the prioritization within the SEC signal that this policy shift is now more than just rhetoric.

The anonymous comment from a Washington trade group executive underscores this: the administration’s active involvement in SEC affairs indicates that the rule change has moved from speculative idea to a near-term policy objective.

Trump’s revived proposal to end quarterly reporting has greater chances of implementation in 2025 due to institutional alignment, deregulatory momentum, and a more controlled political landscape. While investors voice legitimate concerns about reduced transparency and market stability, the administration appears prepared to advance this shift as part of its broader strategy to reduce regulatory burdens and reshape corporate governance toward long-termism. Whether the result will be enhanced strategic thinking or increased market opacity remains subject to future outcomes once the new rule, if enacted, is tested in practice.

Source: Reuters

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Glendon

Economic

Forex

The U.K.'s annual inflation rate was steady at 3.8% in August, according to data released by the Office for National Statistics (ONS) on Wednesday.

Economists polled by Reuters had expected inflation to reach 3.8% in the twelve months to August.

August core inflation, which excludes more volatile energy, food, alcohol and tobacco prices, rose by an annual 3.6%, down from 3.8% in the twelve months to July.

The data comes after the consumer price index hit a hotter-than-expected 3.8% in July, exceeding forecasts.

Finance Minister Rachel Reeves commented that she recognized that "families are finding it tough and that for many the economy feels stuck. That's why I'm determined to bring costs down and support people who are facing higher bills."

Pound sterling was slightly lower against the dollar after the data release, at $1.3637.

The Bank of England is closely watching inflation data after forecasting the consumer price index could peak at 4% in September, before retreating in the early half of 2026.

The central bank cut interest rates in August, taking the key rate from 4.25% to 4%, and saying it would take a "gradual and careful" approach to monetary easing, mindful of inflationary pressures but aware of the need to promote growth and investment.

It next meets on Thursday, but it is not expected to adjust rates this month, and there's uncertainty as to whether it could cut in November.

Sticky inflation is restricting the opportunity for a fourth rate by the BOE this year, Scott Gardner, investment strategist at J.P. Morgan-owned digital wealth manager, Nutmeg, commented Wednesday.

"While wage growth has fallen in recent months, more progress is required on the inflation front to convince the Bank's policymakers that a further rate cut is possible in the current economic environment. A fourth rate cut in 2025 will require further labour market weakness, a somewhat pyrrhic victory," he said in emailed comments.

"With forecasts suggesting inflation could rise even further in the short-term and hit 4% going into the autumn, the cost-of-living strain on household finances will persist in the months ahead," Gardner said, adding that "in short, already sticky inflation is likely to get stickier."

Source: CNBC

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Economic

Commodity

Limited Transmission of U.S. Tariff Policy to Indian Steel Output

At the FT Live Energy Transition Summit held in India on Wednesday, the country’s steel secretary, Sandeep Poundrik, reassured stakeholders that the latest round of tariffs implemented by the United States would not have any significant direct implications on India’s steel sector. This assertion arrives amid growing global concern over the effects of trade protectionism on the international steel supply chain.

The reason behind India’s insulation from these tariffs can be attributed to its limited direct steel exports to the U.S. market. India’s steel exports to the United States account for only a small portion of its total outbound steel shipments. This suggests a weak trade linkage between Indian steel producers and American buyers, which in turn implies a low exposure to tariff-related disruptions. The observed relationship between U.S. policy actions and Indian market dynamics is thus better interpreted as correlational rather than causal.

Focus on Domestic Demand and DiversificationThe Indian steel industry has increasingly oriented itself toward serving robust domestic infrastructure projects and expanding its presence in alternative international markets. This internal demand, supported by government-driven construction and energy initiatives, provides a structural buffer against fluctuations in specific foreign policies such as those of the United States.

Geopolitical Shielding and Strategic Trade Positioning

Moreover, India’s broader trade policy and geopolitical positioning also contribute to this resilience. The country has maintained a strategic distance from direct trade conflicts involving the U.S. and other major steel-producing nations, allowing it to operate outside the direct line of retaliatory tariffs or quota constraints. While the global trade environment remains volatile, India’s diversified export strategy and lower dependency on the U.S. steel market reduce its vulnerability to unilateral tariff shocks.

While U.S. tariffs may cause ripple effects across certain global markets, India's steel industry appears structurally positioned to weather these changes with minimal disruption. The current impact is not driven by a causal mechanism but rather reflects the lack of strong interdependence between Indian steel exports and U.S. import demand. This reinforces the importance of market diversification and domestic demand strength in mitigating external economic pressures.

Source: Reuters

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Economic

Fed Meeting Likely to Deliver First Cut

The Federal Reserve is set to reduce its benchmark interest rate by a quarter percentage point, the first rate cut since December 2024. The decision follows a weakening labor market and persistent inflation around 3%, despite tariffs that had initially threatened higher consumer prices. Analysts expect this move to ease some economic constraints while maintaining a cautious approach to inflation management.

Fed officials remain divided over the magnitude and timing of subsequent cuts. The “dot plot,” which outlines each official’s projected rate trajectory, last indicated two cuts in 2025. While some market participants and economists, including those at Morgan Stanley, anticipate cuts at every remaining meeting through January 2026, others like former Cleveland Fed president Loretta Mester caution that further easing is unlikely unless labor market conditions worsen materially.

Balancing Inflation and Employment

Fed Chair Jerome Powell and colleagues face the challenge of balancing their dual mandate: controlling inflation while supporting maximum employment. Although August job gains were weaker than expected at 22,000, inflation remains sticky. This has led some officials to prioritize labor market concerns, while maintaining a stance that avoids overly aggressive easing. Former Kansas City Fed president Esther George noted that while inflation appears stable, underlying momentum is concerning, reinforcing the Fed’s careful approach.

Wall Street traders are betting on additional cuts at upcoming October and December meetings, with some expecting up to six consecutive reductions, potentially bringing the policy rate down to 2.75–3% by early 2026. This scenario assumes weak economic growth and potential job losses. However, Fed officials are likely to remain data-dependent, emphasizing a cautious path rather than committing to a predetermined sequence of cuts.

The first 2025 rate cut signals a shift toward easing but does not guarantee a rapid series of reductions. Policymakers will continue monitoring inflation and labor data, balancing the need to support the economy against maintaining long-term price stability. Investors should be prepared for market volatility as expectations for Fed action evolve in response to incoming economic data.