Federal Reserve Chair Jerome Powell’s address at Jackson Hole marked a turning point for monetary policy watchers. He said the balance of risks had shifted, with jobs now weighing just as heavily as inflation. That change in tone suggests the Fed is preparing to guard against an economic slowdown after more than two years of aggressive tightening.

The ripple effects were quick to show. Bitcoin surged past $116,000 after trading as low as $112,000 earlier in the session. Ethereum also rallied strongly, climbing above $4,600 from an intraday dip near $4,200. Traders read Powell’s comments as an early sign of a rate cut in September, a development that injected fresh energy into the digital asset market.

Key Takeaways From Powell’s Jackson Hole Speech

As per reports, Fed’s Jerome Powell has admitted that the labor supply is weakening alongside demand, a warning that the economy could tip if policy stays too restrictive. In his Jackson Hole opening remarks, he confirmed that the Fed has stepped away from its flexible average inflation targeting approach, which once allowed overshooting to balance past undershoots.

BREAKING:

🇺🇸 FED CHAIR POWELL SAYS THE “SHIFTING BALANCE OF RISKS MAY WARRANT A POLICY ADJUSTMENT,”

RATE CUT IS COMING !!

— Ash Crypto (@AshCrypto) August 22, 2025

Stable inflation expectations, once considered reliable, are no longer taken for granted. That shift leaves room for the Fed to adjust faster if the jobs market worsens. However, Powell did not explicitly promise a September rate cut, but his language pointed to growing readiness for one as early as September. 

Bitcoin and Ethereum Lead Crypto Market Rally After Policy Hints

Bitcoin and Ethereum have led the reaction, with both coins staging sharp intraday rallies. The move lifted overall crypto market sentiment, spilling into altcoins such as Solana and XRP. Powell’s tone gave investors the green light to add risk, especially in assets that thrive on liquidity.

Bitcoin’s has climbed above $116,500, marking its strongest Jackson Hole reaction in years. Ethereum has also rallied over 9% rebounding above $4,600 adding to the optimism. Across the market, the total crypto market capitalization has also swelled by billions within hours of Powell’s remarks.

With the crypto market now surging following Powell’s rather positive remarks, crypto market liquidation has surged. Over the last 24 hours, a total of 135,300 traders were liquidated, pushing the total liquidations to $549.30 million, as per liquidation data by Coinglass. 

Based on this, volatility could remain high as markets reprice Fed expectations. With a possible rate cut now in sight, positioning in the crypto market is likely to stay aggressive.