Treasury Secretary Bessent Calls For A 50 BPS Rate Cut In September: What Does This Mean For Crypto?

Treasury Secretary Scott Bessent backs a 50bps Fed rate cut in September after weak jobs and soft inflation, boosting crypto sentiment.

U.S. Treasury Secretary Scott Bessent has urged the Federal Reserve to consider a 50-basis-point rate cut at its September meeting. His comments follow strong downward revisions in U.S. job data and a softer-than-expected rise in inflation.

According to an interview, Bessent pointed to the Bureau of Labour Statistics’ (BLS) revised employment figures for May and June. These figures showed a combined loss of 258,000 jobs compared to initial reports. 

He argued that if accurate data had been available earlier, the Fed could have moved to cut rates in June or July.

Inflation Data Strengthens the Case

July’s headline inflation came in at 2.7% year-over-year, just 0.1% above economists’ expectations. While the figure is slightly higher than predictions, it still indicates that inflation is under control.

Lower interest rates reduce borrowing costs. They encourage investment and often drive demand for risk assets. Historically, these conditions tend to boost equities and cryptocurrency markets.

Market expectations for a smaller, 25-basis-point cut next month are still strong, but Bessent believes the data support a larger move. The Fed will receive one more round of employment and inflation figures before making its decision.

Crypto Markets React to Bessent’s Rate Cut Remarks

The crypto market responded quickly to Bessent’s comments. Ethereum surged to multi-year highs on the back of strong gains earlier in the month. Bitcoin also rallied over the weekend, which prompted speculation that an “altcoin season” could come after if macroeconomic conditions remain stable.

Ethereum’s price has more than tripled in the last four months, and is being fueled by inflows from digital asset treasuries and spot U.S. Exchange-Traded Funds (ETFs). Analysts say that while short-term pauses are possible, rate cuts could provide further upward strength for crypto.

Options data shows traders are cautiously optimistic, and many of them are still buying downside protection for the third quarter. 

Historical trends show the quarter often brings relatively smaller returns, which has added to the careful positioning.

Miran Nomination Could Influence Fed Decision

Bessent’s call for a larger rate cut comes as President Donald Trump makes moves to fill a vacancy on the Federal Reserve Board of Governors. Trump has nominated Stephen Miran, who is currently chair of the Council of Economic Advisers, to serve temporarily until January 31.

Bessent expressed hope that the Senate will confirm Miran before the September meeting. This means that his presence could tilt the Fed toward a more aggressive policy move. He described Miran as “thoughtful” and “methodical” and said the nominee understands the challenges facing the central bank.

Trump has shown an openness to other candidates for a longer-term appointment, including former Fed Chair Janet Yellen. The President will also need to name a successor to Jerome Powell when his term ends in May of next year.