Important Highlights
- Treasury Secretary wants to cut a bold half point rate in September to give more energy to the basic economy.
- Crypto prices, especially Ethereum, pointed – low rates promote risky property.
- Investors are interested but still keeping one eye on upcoming jobs and inflation data.
Treasury Secretary Bessent Says It’s Time for the Fed to Act
Treasury Secretary Bessent isn’t holding back. He’s urging the Federal Reserve to slash interest rates by 50 basis points in September, a much bigger move than the small cuts most people were expecting.
Why the urgency? Well, new data shows the job market isn’t as strong as we thought. The data of May and June is quietly amended by 258,000 jobs, which is not a small decline. Because of that, Bessent believes the Fed should step in now instead of waiting for signs of a slowdown to get worse.
On top of that, inflation for July came in at 2.7% year-on-year—a little higher than forecast, but still low compared to past spikes. In Bessent’s view, it’s a green light for more aggressive rate cuts to keep the economy moving and avoid an unnecessary stall.
Treasury Secretary Besent’s words set fire under Crypto
Almost as soon as Treasury Secretary Bessent’s comments hit the airwaves on Fox Business, the crypto market reacted. Ethereum jumped to multi-year highs, and other big coins followed right behind.
Here’s why this happens: Lower interest rates make borrowing cheaper and free up more money in the system. As a result, investors often move their cash into riskier, higher-return opportunities—crypto being one of the first stops for many.
Furthermore, history has shown that digital assets thrive in “risk-on” environments like this, when liquidity is high and investors feel confident. But it’s not blind optimism, some traders are still cautious.
Many are purchasing put options as insurance in case the Fed shifts its stance or the economy experiences an unexpected downturn.
Concluding remarks
If the Fed takes Bessent’s advice, we could see a strong finish to 2025 for both traditional investments and crypto. However, the excitement may subside—at least temporarily, if the central bank continues to make minor decisions.
It serves as a reminder to regular investors of how swiftly monetary policy may cause market volatility. One sharp comment from someone like Treasury Secretary Bessent can send ripples through stocks, bonds, and yes, crypto before most people have even had their morning coffee.