*Source: http://m.g-enews.com/article/Global-Biz/2025/08/202508250446287926906806b77b_1#_PA
● Fed’s Hawkish Jolt Sinks Crypto, Rattles Global Markets
The Impact of Cryptocurrency Plunge and Shifting Fed Rate Outlook on Global Financial Markets
1. Jackson Hole Speech and Shifting Rate Cut Expectations
After Federal Reserve Chair Powell’s recent Jackson Hole speech, expectations for a September interest rate cut dramatically shifted within a single day.Initially, the probability of a 0.25 percentage point rate cut rose from 73.3% to 91.5%, but then it returned to its original level.This event came as a significant shock to financial markets, prompting a heated debate among investors and economic experts.Amidst global economic uncertainty and financial market turmoil, the Fed’s cautious tone and the possibility of policy stance adjustments are drawing attention.
2. Cryptocurrency Market Reaction: Ethereum, Ripple, Bitcoin Plunge
As news of the Fed’s interest rate policy change spread, major cryptocurrencies including Ethereum, Ripple, and Bitcoin suddenly plummeted.Specifically, Ethereum’s rally, which had surpassed the $4,900 mark for the first time ever, turned into a decline following the change in interest rate outlook.Bitcoin also saw an adjustment, falling to a level approximately $10,000 below its all-time high.This sharp decline is more than just market volatility; it directly hit investor sentiment, sending ripple effects across global financial markets.
3. Interaction Between Global Financial Markets and Fed Policy
The Fed’s policy decisions have a cascading effect on global financial markets, influencing the dollar exchange rate, international oil prices, and treasury yields.While expectations for interest rate cuts had once driven up prices of various financial assets, not just cryptocurrencies,as that outlook shifted, investors turned to safe-haven assets, increasing market volatility.Even Eric Rosengren, former President of the Federal Reserve Bank of Boston, warned that “if the data continues to be weak, rate cuts are inevitable,”suggesting that the market needs to move cautiously.
4. Future Outlook and Investor Response Strategies
While this recent plunge signals short-term turmoil for the global economic outlook,there is also an expectation that the Fed’s policy changes could contribute to economic recovery and stability in the long run.Investors need to carefully analyze the market reactions demonstrated in this case,focusing on the interaction between financial markets and cryptocurrencies, as well as the Fed’s shift in policy stance,and readjust their risk management and investment strategies.Diversifying portfolios, taking into account future volatility in interest rates, exchange rates, and international oil prices, emerges as a key strategy.
[Related Articles…]Bitcoin Plunge, Global Financial Market Shock |Fed Interest Rate Policy, Re-evaluating Investment Strategies
*Source: http://m.g-enews.com/article/Global-Biz/2025/08/202508250446287926906806b77b_1#_PA
● Fed’s Hawkish Jolt Sinks Crypto, Rattles Global Markets
The Impact of Cryptocurrency Plunge and Shifting Fed Rate Outlook on Global Financial Markets
1. Jackson Hole Speech and Shifting Rate Cut Expectations
After Federal Reserve Chair Powell’s recent Jackson Hole speech, expectations for a September interest rate cut dramatically shifted within a single day.Initially, the probability of a 0.25 percentage point rate cut rose from 73.3% to 91.5%, but then it returned to its original level.This event came as a significant shock to financial markets, prompting a heated debate among investors and economic experts.Amidst global economic uncertainty and financial market turmoil, the Fed’s cautious tone and the possibility of policy stance adjustments are drawing attention.
2. Cryptocurrency Market Reaction: Ethereum, Ripple, Bitcoin Plunge
As news of the Fed’s interest rate policy change spread, major cryptocurrencies including Ethereum, Ripple, and Bitcoin suddenly plummeted.Specifically, Ethereum’s rally, which had surpassed the $4,900 mark for the first time ever, turned into a decline following the change in interest rate outlook.Bitcoin also saw an adjustment, falling to a level approximately $10,000 below its all-time high.This sharp decline is more than just market volatility; it directly hit investor sentiment, sending ripple effects across global financial markets.
3. Interaction Between Global Financial Markets and Fed Policy
The Fed’s policy decisions have a cascading effect on global financial markets, influencing the dollar exchange rate, international oil prices, and treasury yields.While expectations for interest rate cuts had once driven up prices of various financial assets, not just cryptocurrencies,as that outlook shifted, investors turned to safe-haven assets, increasing market volatility.Even Eric Rosengren, former President of the Federal Reserve Bank of Boston, warned that “if the data continues to be weak, rate cuts are inevitable,”suggesting that the market needs to move cautiously.
4. Future Outlook and Investor Response Strategies
While this recent plunge signals short-term turmoil for the global economic outlook,there is also an expectation that the Fed’s policy changes could contribute to economic recovery and stability in the long run.Investors need to carefully analyze the market reactions demonstrated in this case,focusing on the interaction between financial markets and cryptocurrencies, as well as the Fed’s shift in policy stance,and readjust their risk management and investment strategies.Diversifying portfolios, taking into account future volatility in interest rates, exchange rates, and international oil prices, emerges as a key strategy.
[Related Articles…]Bitcoin Plunge, Global Financial Market Shock |Fed Interest Rate Policy, Re-evaluating Investment Strategies
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