Recent Core PCE inflation data has significantly influenced expectations for a Federal Reserve rate cut in September 2025.
Federal Reserve's Rate Decisions
The Federal Reserve maintained its federal funds rate at 4.25%-4.50% following the July FOMC meeting. Inflation metrics continue to influence decision-making. "Core PCE inflation is expected to remain at 2.8% year-over-year," noted Jerome Powell.
Market Reactions
CME FedWatch data indicated a significant drop in September rate cut odds from 63.7% to 39.2%. Bitcoin and Ethereum prices showed minimal reactions, despite expectations for tighter financial conditions.
Financial Market Implications
David Mericle from Goldman Sachs views rate cut odds as above 50%, indicating uncertainty. This scenario may pose challenges in financial markets, especially for interest rate-sensitive assets like BTC and ETH.
The situation regarding inflation and Federal Reserve interest rates continues to be monitored closely, impacting both traditional financial markets and cryptocurrency assets.
