Crypto in Late 2025 and Beyond: What Powell’s Speech Signals for Rates, Inflation and Assets
0Powell’s Jackson Hole speech showed how the Fed is weighing inflation against jobs. That balance could shape policy in the fourth quarter of 2025 and beyond.
Fed Chair Jerome Powell’s speech on Friday at this year's Jackson Hole Economic Policy Symposium balanced rising inflation risk against a fragile labor market, and the political calendar now raises the odds that his eventual successor will be less cautious on rates.
Powell’s message was deliberately sober.
He said the “effects of tariffs on consumer prices are now clearly visible” and will keep filtering through with uncertain timing. Headline PCE inflation ran 2.6% in July and core 2.9%, with goods prices flipping from last year’s declines to gains.
He framed the labor market as a “curious kind of balance,” with payroll growth slowing to about 35,000 a month in recent months from 168,000 in 2024 while unemployment sits at 4.2%.
Immigration has cooled, labor force growth has softened and the breakeven pace of hiring needed to keep joblessness steady is lower, which masks fragility. Net-net, he said near-term risks are “tilted to the upside” for inflation and “to the downside” for employment, a mix that argues for care rather than a rapid easing cycle.
He also reset the framework.
The Fed dropped 2020’s “average inflation targeting,” returned to flexible 2% targeting and clarified that employment can run above estimated maximum levels without automatically forcing hikes, but not at the expense of price stability.
He underscored, “We will not allow a one-time increase in the price level to become an ongoing inflation problem.” Policy is “not on a preset course,” and while September is live, the bar for a fast series of cuts looks high unless the data weakens more.
That macro stance lands inside a new political backdrop that markets cannot ignore. Powell’s current term ends May 15, 2026, and he has said he intends to serve it out. Donald Trump has attacked Powell and calls for lower rates, but legal protections mean a president cannot remove a Fed governor or chair over policy disagreements.
Trump can announce his preferred replacement for Powell well before 2026, giving markets time to price in a chair who is likely to be more dovish and tolerant of growth risk than Powell. That looming shift matters for how the path of rates evolves into 2026, even if the next few FOMC meetings remain data dependent.
Political tension surfaced again on Friday when Trump publicly threatened to fire Fed Governor Lisa Cook over alleged mortgage fraud if she did not resign. Like Powell, governors have strong protections and can only be removed for cause. Markets read this less as an immediate governance threat and more as a sign that personnel pressure on the Fed could grow, increasing uncertainty around future leadership and communication.
The speech points to a slower, shallower easing path in the fourth quarter of 2025 unless inflation retreats convincingly. Tariff pass-through keeps goods prices sticky while services ease only gradually, which argues for front-end yields staying firm and the curve steepening only if growth data weakens.
A future, less cautious chair could compress term premiums later by signaling a quicker path to neutral, but between now and then rate volatility stays high and rallies are data-led rather than policy-led.
A careful Fed supports the soft-landing narrative but not a quick...
https://www.coindesk.com/markets/2025/08/24/crypto-in-late-2025-and-beyond-what-powell-s-speech-signals-for-rates-inflation-and-assets
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