Bitcoin continues to face downward pressure as the Federal Reserve remains firm on its interest rate policy. The latest comments from Cleveland Fed President Beth Hammack reinforce expectations that a rate cut is unlikely at the upcoming Federal Open Market Committee (FOMC) meeting, sending markets—including crypto—into a reevaluation mode.

Fed Signals No Immediate Policy Shift

At the Kansas City Federal Reserve’s Economic Symposium in Jackson Hole, Beth Hammack stated in an interview with Yahoo News that the economic data doesn’t currently support a rate reduction in September. She cited ongoing inflationary pressures, noting, “We have inflation that’s too high and has been trending upwards over the past year.”

Hammack emphasized that inflation is still absorbing the impact of implemented tariffs and warned that their full economic effects may not be realized until next year. This tone reinforces the Fed’s cautious stance despite mounting pressure from dovish policymakers and political figures pushing for softer monetary policy.

Support for Powell’s Hawkish Approach

Hammack’s remarks suggest that Federal Reserve Chairman Jerome Powell retains significant support for his inflation-fighting strategy. This comes in contrast to two dissenting votes at the last Fed meeting and increasing political advocacy—including from former St. Louis Fed President Jim Bullard—for more aggressive rate cuts. Just this morning, Bullard publicly recommended slashing interest rates by 100 basis points below their current levels.

This divergence in viewpoints highlights the current divide within and around the Fed on how best to achieve price stability, with Powell’s allies arguing that more time is needed before considering any rate relief.

Bitcoin and Investors Rethink Fed Policy Odds

Just last week, optimism surrounding a potential rate cut fueled a record surge in Bitcoin, which peaked above $124,000. However, shifting sentiment around the Fed’s policy approach has quickly reversed those gains. According to the CME FedWatch Tool, expectations for a September rate cut have dropped from 100% to 71% over just seven days. Consequentially, Bitcoin (BTC) has fallen nearly 10%, bringing its price down to approximately $112,800.

A digital chart illustrating Bitcoin’s sharp price fall to $112,800 following the Federal Reserve’s message against immediate rate cuts.

The market correction underscores just how sensitive cryptocurrency assets remain to macroeconomic policy changes, especially those coming from central bank officials.

Looking Ahead to Powell’s Keynote Address

All eyes now turn to Jerome Powell’s scheduled keynote on Friday morning at Jackson Hole. Investors and analysts expect the Fed Chair to underscore his commitment to controlling inflation, likely reinforcing a wait-and-see stance on interest rate policy adjustments.

Such a narrative would further dampen near-term hopes of easing and could drive continued volatility across both traditional and digital asset markets, especially if inflation data shows persistence in coming months.

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Until then, cryptocurrency traders and institutional investors must navigate a challenging environment shaped by policy caution, inflation concerns, and unpredictable geopolitical currents.