Dow Soars, Bitcoin Climbs as Powell Acknowledges Path Toward Cuts

Federal Reserve Chair Jerome Powell, speaking at the central bank’s annual Jackson Hole symposium, confirmed that policy “may warrant” adjustment as conditions evolve.

He emphasized that with interest rates still in restrictive territory, stable labor market indicators give the Fed room to “proceed carefully” when weighing its next move.

These remarks come directly from the Federal Reserve’s published transcript of Powell’s prepared speech.

Markets responded swiftly. The Dow Jones Industrial Average rose about 649 points, or 1.4 percent. The S&P 500 and Nasdaq Composite both gained roughly 1.3 percent. Treasury yields dropped, with the 10-year note settling near 4.27 percent.

These shifts reflected rising investor expectations that the Fed could begin cutting rates as early as its September 16-17 meeting if data confirm slower growth.

Powell outlined a shifting balance of risks. Inflation remains above the two percent target in some service categories but has moderated compared with the peaks of 2022 and 2023.

At the same time, the economy has cooled. Official figures show first-half 2025 gross domestic product expanding only about 1.2 percent, roughly half last year’s pace.

Dow Soars, Bitcoin Climbs as Powell Acknowledges Path Toward Cuts

He also noted that recent tariffs have lifted some prices, though he described these increases as a one-time adjustment rather than an ongoing source of inflation.

That framing suggested the Fed could support the labor market without fueling new inflationary cycles. Reactions extended beyond equities.

Bitcoin, which set record highs earlier in August, gained strongly during Powell’s remarks as traders saw confirmation of easier policy ahead. Other major cryptocurrencies also held firm.

Gold and silver, weaker before the speech on a stronger dollar, steadied and then turned slightly higher as yields fell.

Exchange-traded funds tracking the metals registered gains of around half a percent in afternoon trading.

The Federal Reserve also released a revised Statement on Longer-Run Goals and Monetary Policy Strategy the same day, a move that reinforces how policymakers communicate the balance between employment and price stability.

That change provided additional context for investors evaluating the possibility of cuts. The broader message is clear. Powell did not announce a reduction in rates, but he acknowledged conditions that could justify one.

For businesses and households, lower borrowing costs could follow if the slowdown deepens.

At the same time, the Fed remains intent on ensuring inflation expectations do not rise again.

This marks a turn from the central bank’s single focus on inflation over the past two years toward a more balanced evaluation of risks.

The signal to markets: the door is open to easing, but only if the data demand it.