The crypto market is trading with renewed optimism as investors bet on deeper monetary easing from the U.S. Federal Reserve this month.
A Sept. 8 report from Reuters said Standard Chartered now expects the Fed to cut interest rates by 50 basis points at its September policy meeting, double its earlier forecast of 25 bps.
Weaker labor data shifts Fed outlook
The shift in expectations comes after August non-farm payrolls showed just 22,000 jobs added, well below the 75,000 forecast, while unemployment rose to 4.3%, breaking out of its 15-month range. Standard Chartered said the labor market had gone “from solid to soft in less than six weeks,” opening the door to a more aggressive cut.
Bank of America also adjusted its forecast, now projecting two quarter-point cuts in September and December. However, Standard Chartered suggested the September move could be a one-off, noting that “sticky inflation and fiscal easing” may limit further cuts this year.
Markets are now pricing a near-certain reduction at the upcoming Federal Open Market Committee meeting, with traders closely awaiting Fed Chair Jerome Powell’s Sept. 17 address for confirmation.
Crypto market sentiment lifts on rate-cut bets
For digital assets, the prospect of looser monetary policy has fueled bullish sentiment. Lower rates steepen the yield curve and reduce borrowing costs, both of which create favorable conditions for Bitcoin (BTC) and other risk assets.
This optimism seems to be reflected in derivatives markets. With high demand for December 2025 call options, open interest in Bitcoin options has increased. This positioning implies that traders are confident that macro conditions could push Bitcoin to new highs, in addition to anticipating additional gains.
The rate cut debate also comes amid broader concerns over Fed independence, as the Department of Justice recently issued subpoenas linked to mortgage fraud claims against Fed Governor Lisa Cook. The scrutiny raises more questions about the direction of Fed policy.
With liquidity expected to improve and risk appetite returning, investors see the Fed’s September decision as a potential catalyst for the next phase of crypto market momentum.