Fed’s Bowman Backs 3 Rate Cuts By Year-End – Another Crypto Catalyst?

Federal Reserve Governor Michelle Bowman has publicly called for the US central bank to implement multiple interest rate cuts before 2025 ends. Michelle’s statement comes amid a monetary policy stalemate between US President Donald Trump and Fed Chairman Jerome Powell.

Rate Cuts Will Reduce Labor Market Erosion – Bowman

In the past few months, the US Federal Reserve has opted to hold interest rates steady between 4.25% to 4.50% despite opposing calls by Trump and White House personnel for a rate cut. Both parties have continually voiced their arguments with the majority of the Fed’s Federal Open Market Committee (FOMC), targeting to keep inflation down, while the US government pushes for a lower borrowing rate to stimulate the economy.

According to a Bloomberg report on August 9, Fed Governor Bowman publicly supports a reduction in interest rates, even advocating for three rate cuts before 2025 runs out. In a speech at the Kansas Bankers Association in Colorado Springs, the US attorney bases this proposal on recent labor market data, which showed an increase in unemployment from 4.1% to 4.2%, as new jobs created were lower-than-expected, 73,000.

Bowman is pushing other policy makers in the FOMC committee to join her and Fed Governor Chris Waller, who were the only dissenting votes in the last meeting in July. She advocates beginning interest rate cuts in September and sustaining this dovish stance with additional reductions in October and December.

The Fed Governor believes this measure would help avert any “further unnecessary erosion in labor market conditions” while maintaining economic stability, as Trump’s tariff would likely yield no catalyzing effect on inflation.

The Fed Governor said:

As I gain even greater confidence that tariffs will not present a persistent shock to inflation, I see that upside risks to price stability have diminished; With underlying inflation on a sustained trajectory toward 2%, softness in aggregate demand and signs of fragility in the labor market, I think that we should focus on risks to our employment mandate.

Notably, three additional FOMC officials, namely Governor Lisa Cook, San Francisco Fed President Mary Daly, and Minneapolis Fed President Neel Kashkari, have also voiced concerns over the latest jobs data, setting the tone for rising anticipation ahead of the next policy meeting.

Catalysts Stack Up For The Next Crypto Surge

In addition to a potential rate cut, a historical driver of capital flows into risk assets like crypto, the market is buoyed by regulatory tailwinds and institutional pathways. Recent moves toward digital asset-friendly legislation, such as the GENIUS Act, and initiatives such as the SEC’s crypto project highlight progress under President Trump’s crypto-friendly administration.

Meanwhile, industry momentum also rests on the growing promise of altcoin spot ETF approvals with underlying assets such as XRP, Solana, Dogecoin, etc. Together, these factors set the stage for an exciting few months ahead for the crypto industry. At press time, the total cryptocurrency market cap stands at $3.91 trillion, up 1.07% in the past 24 hours.