Jerome Powell’s Dovish Shift Sparks Bitcoin Rally Amid Fed Rate Cut Expectations

Federal Reserve Chair Jerome Powell has signaled a dovish turn in monetary policy, emphasizing rising risks in the U.S. labor market — a move that has fueled optimism for another Fed rate cut this month and triggered a rebound in Bitcoin prices.

Speaking at the Annual Meeting of the National Association for Business Economics, Powell noted that the outlook for employment and inflation has remained largely unchanged since September. This suggests the Federal Open Market Committee (FOMC) is likely to deliver another rate cut in October, reflecting the central bank’s growing concern over labor market weakness.

Recent FOMC minutes revealed that last month’s rate cut was driven by signs of a softening job market. Powell reiterated that “downside risks to employment appear to have risen,” reinforcing expectations of continued policy easing.

Following his remarks, Bitcoin (BTC) surged as investors priced in the possibility of another rate cut. According to TradingView data, BTC broke above $112,000 and climbed to around $112,800, rebounding sharply from a session low of $110,000 earlier in the day. This recovery comes after recent declines linked to mounting U.S.–China trade tensions.

Powell also hinted at a potential halt to the Fed’s balance sheet reduction, suggesting a shift from quantitative tightening toward easing. “We may be approaching the point where balance sheet runoff stops,” he said, signaling a more accommodative stance.

The dovish outlook and liquidity boost expectations have been positive for Bitcoin, which recently reached a new all-time high above $126,000 earlier this month. As the Fed leans toward further rate cuts, investor appetite for alternative assets like Bitcoin continues to strengthen — highlighting the growing correlation between monetary policy and crypto market performance.