Nearly unanimous consensus among economists points to a Fed rate cut next week, with Bitcoin positioning for a potential rally toward $140,000 as monetary policy shifts toward accommodation.
A Reuters poll found 105 of 107 economists expect a 25 basis-point reduction on September 17, marking the first easing since the central bank paused its cycle in January.
Labor Market Weakness Drives Unanimous Rate Cut Consensus
The massive shift towards a rate cut comes after stalling job growth in August and sharp downward revisions erasing 900,000 jobs from the 12-month data through March.
Markets have fully priced in the September cut and now anticipate three reductions by year-end, compared to two just weeks ago.
Bitcoin surged above $116,000 following fresh inflation data that reinforced rate cut expectations.
Producer Price Index unexpectedly declined 0.1% in August against forecasts for a 0.3% increase, while Consumer Price Index confirmed headline inflation quickened but not enough to derail monetary easing bets.
The softer wholesale inflation and labor market weakness prompted the Fed to shift its focus from price stability concerns to supporting economic growth.
Weekly jobless claims spiked to 263,000, the highest since October 2021, while the unemployment rate holds at 4.3%.
Source: ReutersFed Pivot Triggers Bitcoin Rally Toward All-Time Highs
Bitcoin briefly touched $116,000 as investors positioned ahead of decisive Fed action, with the cryptocurrency gaining momentum from institutional flows and technical breakouts.
Spot Bitcoin ETFs drew $553 million in net inflows on September 11, marking the fourth consecutive day of gains as allocators seek protection against currency debasement risks.
Source: SosoValueTraders identified a key MACD bullish crossover on Bitcoin’s chart, the first since April’s low, historically preceding major rallies.
BitBull noted similar patterns drove 40% surges within a month, reaching new highs as momentum indicators flipped positive.
Technical analysis reveals Bitcoin breaking out of a descending channel containing price action since mid-August.
Two ascending triangle patterns emerged, with one completed triggering breakouts above channel resistance and a larger triangle validating the bullish thesis toward $120,000 targets.
However, accumulator addresses holding 266,000 BTC reached record levels even as futures market dynamics signal caution.
Whale participation declined with smaller traders driving volume, while futures taker sell pressure outpaced buys, creating bearish sentiment that could limit upside momentum.
The Value Area High sits at $114,000, with sustained moves above this level potentially pushing prices toward $117,600.
Conversely, failure to hold $111,950 may accelerate declines toward $107,250 as the market balances strong accumulation against fading speculative activity.
Powell Pressure Mounts as Trump Demands Aggressive Easing
President Trump intensified criticism of Fed Chair Jerome Powell, demanding immediate rate cuts while threatening major lawsuits over interest cost policies.
Trump posted on Wednesday, declaring “NO INFLATION!!! TOO LATE. MUST LOWER THE RATE, BIG, RIGHT NOW. POWELL IS A TOTAL DISASTER.”
The political pressure coincides with Powell’s acknowledgment that employment risks may outweigh inflation concerns.
Speaking at Jackson Hole, Powell hinted at quarter-point cuts as “highly likely” while warning against assuming rapid easing sequences, stressing policy remains data-dependent.
In the Reuters report, Morgan Stanley’s Michael Gapen advocated for measured 25-basis-point reductions, noting four months of labor demand slowdown evidence.
“In short, ignore where inflation is today and ease policy to support the labor market. […] We think a 25bp rate cut in September is more likely than a larger cut,” he said.
Treasury Secretary Scott Bessent has also previously urged steeper 50-basis-point moves after core CPI cooled to 3.1% annually.
CME FedWatch shows 100% ease probability of September cuts, with major banks including Barclays and Deutsche Bank revising forecasts for imminent easing.
Source: CMESimilarly, Crypto.com CEO Kris Marszalek expects a strong fourth-quarter performance for digital assets if rate cuts materialize, citing improved liquidity and institutional adoption driving $1.5 billion exchange revenue.
As Trump intensifies his replacement threat against Powell, European Central Bank President Christine Lagarde warned that Trump’s Fed independence would create “very serious danger” for global economic stability.
Powell’s term expires in May, with replacement discussions intensifying amid political pressure for monetary accommodation.
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