In a speech in Miami on Thursday, Federal Reserve Governor Christopher Waller voiced his support for an interest rate cut in September, saying he would entertain a bigger move if labor market data continues to weaken.
“Based on what I know today, I would support a 25 basis point cut at the Committee’s meeting on September 16 and 17,” Waller said during the speech.
Waller is considered to be on the short list of potential replacements for Fed Chair Jerome Powell next year and was one of two Fed governors to dissent from the July FOMC decision to hold benchmark interest rates steady.
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Fed Chair Jerome Powell hinted at a potential rate cut in September in his recent address, lifting expectations in the market.
Crypto reversal imminent?
The crypto market saw fresh selling pressure in the early Friday session amid hotter than expected inflation data.
Major cryptocurrencies fell, with Bitcoin dropping nearly 5% to trade near $108,000. XRP, Dogecoin, Stellar (XLM), Shiba Inu, Cardano (ADA) and Chainlink (LINK) reported losses between 4% and 8%.
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Inflation rose in July, according to the Federal Reserve’s preferred inflation measure. On the monthly basis, the core PCE index increased 0.3%, in line with expectations. The personal consumption expenditures price index, which the Fed uses as its forecasting tool, showed that core inflation ran at a 2.9% seasonally adjusted annual rate, up 0.1 percentage point from June and the highest annual rate since February.
With a target of 2%, the report shows the economy is still a distance from where the Fed feels comfortable. However, markets expect the Fed to resume lowering its benchmark interest rate when policymakers convene next month, which is bullish for cryptocurrencies.