The Fed Shifts Focus: From Inflation to Employment

The latest press conference by Federal Reserve Chair Jerome Powell delivered a new surprise to global financial markets. Powell emphasized that economic risks are now more tilted toward employment rather than just inflation. This signals that the Fed is paying closer attention to the potential weakening of the U.S. labor market.

In addition, Powell announced the termination of the flexible average inflation targeting (FAIT) framework, which had been in place since 2020. In other words, the U.S. central bank will no longer treat stable inflation expectations as a guaranteed assumption.

This marks a significant shift in the Fed’s monetary policy direction and opens the door for a potential interest rate cut in September 2025.

Immediate Impact on the Crypto Market

As soon as Powell’s remarks hit the wires, the crypto market reacted swiftly:

• Bitcoin (BTC) jumped more than 3% within minutes.
• Ethereum (ETH) surged over 7%.

According to data from Coinglass, over $200 million in liquidations occurred within an hour of Powell’s press conference. Of that, around $180 million came from short positions, with ETH liquidations exceeding $110 million.

This highlights how many traders betting on a downturn were caught off guard by the sudden rally.

Bullish Signal: Is Altseason About to Begin?

The sharp price spike sent a strong bullish signal. Historically, Fed rate cuts have often fueled risk-on sentiment, boosting assets like crypto.

Many analysts now believe that if this momentum continues, we could see:

• A longer Bitcoin bull run.
• A potential altseason, echoing the cyclical four-year patterns often seen in the crypto market.

Still, the crypto market remains highly volatile. While the bullish signals are clear, investors should manage strategies wisely especially given the broader uncertainties in the global economy.

Conclusion

Powell’s FOMC press conference marked a turning point:

• The Fed’s focus has shifted more toward employment.
• The flexible inflation framework has been scrapped.
• There’s now a strong possibility of a rate cut in September.

For crypto, these signals acted as an immediate bullish catalyst, pushing BTC and ETH prices sharply higher. Could this be the start of the next altseason? Time will tell but for now, bullish momentum is back in the crypto market.