Investor optimism surged early this week after a second Federal Reserve member hinted at the potential for an interest rate cut as soon as July. Following last Friday’s remarks from Governor Christopher Waller, Fed Governor Michelle Bowman has now echoed a similar stance, reinforcing market expectations. Bitcoin reacted quickly, climbing past $102,500 and hitting a fresh daily high, while traders now eagerly await Friday’s PCE inflation data.
Rate Cut Momentum Builds Inside the Fed
Fed members Waller and Bowman both signaled that a July rate cut could be on the table, provided that upcoming data confirms cooling inflation and continued moderation in the labor market. In a statement on Monday, Bowman noted:
“By the time of our next meeting in July, we will have another month of employment and inflation data. If those reports continue to show positive inflation trends and limited upward pressure, I would support reducing the policy rate to bring it closer to neutral while maintaining labor market strength.”
Her comments followed a similar tone to Waller’s, suggesting a growing internal consensus for easing monetary policy—even as core PCE inflation is expected to tick slightly higher, from 2.5% to 2.6%.
Crypto Bulls Eye July Fed Meeting
The crypto market has responded favorably to the dovish outlook. Bitcoin breached $102,000 for the first time in over a week, and equities followed suit—the S&P 500 nearly reclaimed the 6,000 level, while the U.S. Dollar Index dropped to 98.9.
The alignment of slowing job creation and contained inflation appears to be giving the Fed breathing room. According to Dey There analysts, the possibility of a near-term rate cut is increasing the appeal of risk assets, including digital currencies. Historical patterns support this optimism: major crypto rallies have often coincided with periods of monetary easing.
All Eyes on Friday’s PCE Data
This week’s focus will shift to the upcoming PCE inflation report—the Fed’s preferred inflation metric. If the data comes in within expectations and avoids any upside surprises, the probability of a July rate cut could increase significantly.
For crypto investors, these macro signals are key. Dey There notes that even a modest shift in Fed policy could provide a tailwind for digital assets heading into the second half of 2025.
Sources:
Federal Reserve Public Statements – June 2025
TradingView BTCUSD Chart
U.S. Bureau of Economic Analysis PCE Forecast
Reuters Economic Calendar
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