Crypto Slips as Fed Officials Clash Over Path of Rate Cuts
The Federal Reserve’s first rate cut of the year has done little to lift markets, and instead exposed deep divisions among policymakers on how far to go. That uncertainty is spilling into crypto, where Bitcoin has retreated sharply from last week’s highs.
Stephen Miran, one of the Fed’s newest governors, is pressing for urgency. He wants the central bank to move in half-point steps until policy reaches a more neutral level, arguing that the current stance is squeezing the economy and leaving it exposed to sudden shocks. His position was already visible at the latest FOMC meeting, where he cast the sole dissent in favor of a 50 bps reduction.
Miran also dismissed colleagues’ fixation on Trump’s tariffs as a renewed inflation risk. For him, the bigger danger lies in the labor market, which he believes is already losing steam.
Pushback From Within the Fed
Other policymakers are signaling caution. Raphael Bostic and Alberto Musalem have both suggested inflation is still too sticky for more cuts this year. Kansas City’s Jeff Schmid echoed that view, warning that the Fed may not need to ease again at all. Chicago’s Austan Goolsbee struck a middle note, saying further reductions could be justified if stagflation fears fade, but admitted inflation is still the most immediate problem.
Treasury Secretary Scott Bessent sided with Miran’s camp, criticizing Powell for not being bolder and even floating the idea of up to 150 bps of easing before year-end.
Powell’s Balancing Act
Chair Jerome Powell has tried to hold the middle ground. He framed last week’s quarter-point move as a “risk-management” cut — enough to acknowledge a softening jobs market, but not a signal of an aggressive easing cycle. His message: the next steps will depend squarely on incoming data.
Markets React
Traders have dialed back expectations for October. Fed futures now price an 83% chance of another 25 bps cut, with nearly one in five betting rates stay unchanged. That hesitation has weighed on crypto. Bitcoin, which had spiked above $117,000 after the Fed meeting, has since fallen back toward the $111,000 range. Ethereum has mirrored the weakness, sliding as ETF flows continue to leak.
For now, the crypto market is caught in the same stalemate as the Fed itself: investors waiting to see whether the next move is bold, cautious, or nothing at all.
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