Federal Reserve Chairman Powell predicts a 50 basis point interest rate cut before the end of the year, with significant reductions unlikely to happen again

Federal Reserve Chairman Jerome Powell stated at a meeting hosted by the National Association for Business Economics today that despite the gradual easing of inflation, the US labor market remains robust. He also hinted that there may not be a significant interest rate cut this month at the next two meetings of the Federal Reserve.

Powell said during the Q&A session:

This is not a committee eager to quickly cut interest rates. Ultimately, we will be guided by the upcoming data release

The US central bank began its long-awaited easing policy earlier this month, lowering its benchmark interest rate for the first time in four years. After maintaining interest rates at a 20-year high for over a year, the first significant 50 basis point rate cut is considered a major move.

Powell said that if the economic performance meets expectations, there are expected to be two more interest rate cuts this year, and added that "the federal funds rate will fall by 50 basis points by the end of the year.

Meanwhile, according to FedWatch data, traders' expectations for the Federal Reserve to cut interest rates by 25 basis points in October have further strengthened, rising from 46% the day before to 65%. At the same time, financial market participants expect the target interest rate range to be 4.00% -4.25% after the December meeting, which is 75 basis points lower than the current level.

The Federal Reserve has been trying to provide so-called 'soft landing' conditions for the economy, where inflation decreases without a significant increase in unemployment rate. Despite the Federal Reserve's increasing confidence in this, Powell stated that the central bank is still prepared to continuously adjust policies based on data

If the economic slowdown exceeds our expectations, we can lower interest rates faster; if the economic slowdown is less than expected, we can slow down the rate of interest rate cuts. We will adjust our pace of action as needed

Despite Powell's signals of continuous interest rate cuts, it still has not had any boosting effect on Bitcoin. Bitcoin even fell below $63000 this morning and has rebounded above $63000 at the time of writing this article.