Federal Reserve Chairman Powell recently concluded the 67th Annual Meeting of the National Association for Business Economics [NABE] in Philadelphia, Pennsylvania. The speech took a technical tone, focusing on the Fed’s balance-sheet strategy rather than new policy surprises.
Powell said the central bank may soon slow its balance-sheet runoff, a move that hints at easing liquidity pressure. This could be a significant boost for crypto assets like Bitcoin and Ethereum. Powell said the Fed “may approach that point in coming months” where reserve levels are adequate. This implies a possible pause in quantitative tightening [QT].
The Fed’s shift suggests a recognition that aggressive tightening could strain liquidity. A dynamic crypto investors are watching closely, given its sensitivity to dollar flows and treasury yields. Crypto’s path now hinges on data delayed by the U.S. government shutdown, particularly next week’s CPI release.
If inflation softens and the Fed confirms a QT slowdown, the market could regain momentum into late October. For now, Powell’s tempered tone offers a pause, not a pivot, and crypto is responding in kind. As of now, at the time of writing this article, the total crypto market capitalization is $3.7T and the crypto average RSI lies under the oversold range at 43.64.