Fed’s September Rate Cut Likelihood Drops to 50%

The Federal Reserve’s rate cut probability for September 2025 has decreased from 80% to around 50%, affecting traditional and crypto markets.

The shift in rate cut likelihood affects market expectations and crypto asset movements as investors reevaluate risk strategies.

The recent assessment by Goldman Sachs revised the probability of a September Fed rate cut to approximately 50%. This adjustment reflects the continuing impact of economic trends, including labor improvements. Concerns over potential rate cuts have shifted, impacting market dynamics.

“The probability of a rate cut in September is slightly above 50%… They cite multiple pathways to achieve this goal, including minimal tariff impacts and genuine labor market weakness, or market panic due to monthly fluctuations” — Jan Hatzius, Chief Economist, Goldman Sachs

Jerome Powell, Chair of the Federal Reserve, remains central to the monetary policy debate. Recent data show labor market resilience, influencing various stakeholders. Economists cite diminished tariff impacts as another factor.

The possibility of rate cuts influences both traditional and crypto markets. Major cryptocurrencies like Bitcoin and Ethereum may see capped rallies due to altered anticipation. Financial instruments and their returns could also adjust in response to these changes.

Historically, the Fed has adjusted interest rates during economic volatility, showcasing cautious policymaking. Economic data and geopolitical factors will remain critical to these decisions, influencing future market behavior.

Potential outcomes involve shifts in asset allocations, regulatory responses, and technological advancements. Market actors continue to analyze past trends and current data, preparing for diverse scenarios based on updated Fed policies.