Investors are counting down to the Federal Reserve’s Sept. 17 monetary policy decision; markets expect a quarter-point rate cut that could trigger short-term volatility but potentially fuel longer-term gains across risk assets.

The economic backdrop highlights the Fed’s delicate balancing act.

According to the latest CPI report released by the U.S. Bureau of Labor Statistics on Thursday, consumer prices rose 0.4% in August, lifting the annual CPI rate to 2.9% from 2.7% in July, as shelter, food, and gasoline pushed costs higher. Core CPI also climbed 0.3%, extending its steady pace of recent months.

Producer prices told a similar story: per the latest PPI report released on Wednesday, the headline PPI index slipped 0.1% in August but remained 2.6% higher than a year earlier, while core PPI advanced 2.8%, the largest yearly increase since March. Together, the reports underscore stubborn inflationary pressure even as growth slows.

The labor market has softened further.

Nonfarm payrolls increased by just 22,000 in August, with federal government and energy sector job losses offsetting modest gains in health care. Unemployment held at 4.3%, while labor force participation remained stuck at 62.3%.

Revisions showed June and July job growth was weaker than initially reported, reinforcing signs of cooling momentum. Average hourly earnings still rose 3.7% year over year, keeping wage pressures alive.

Bond markets have adjusted accordingly. Per data from MarketWatch, 2-year Treasury yield sits at 3.56%, while the 10-year is at 4.07%, leaving the curve modestly inverted. Futures traders see a 93% chance of a 25 basis point cut, according to CME FedWatch.

If the Fed limits its move to just 25 bps, investors may react with a “buy the rumor, sell the news” response, since markets have already priced in relief.

Equities are testing record levels.

The S&P 500 closed Friday at 6,584 after rising 1.6% for the week, its best since early August. The index’s one-month chart shows a strong rebound from its late-August pullback, underscoring bullish sentiment heading into Fed week.

The Nasdaq Composite also notched five straight record highs, ending at 22,141, powered by gains in megacap tech stocks, while the Dow slipped below 46,000 but still booked a weekly advance.

Crypto and commodities have rallied alongside.

Bitcoin is trading at $115,234, below its Aug. 14 all-time high near $124,000 but still firmly higher in 2025, with the global crypto market cap now $4.14 trillion.

Gold has surged to $3,643 per ounce, near record highs, with its one-month chart showing a steady upward trajectory as investors price in lower real yields and seek inflation hedges.

Historical precedent supports the cautious optimism.

Analysis from the Kobeissi Letter — reported in an X thread posted Saturday — citing Carson Research, shows that in 20 of 20 prior cases since 1980 where the Fed cut rates within 2% of S&P 500 all-time highs, the index was higher one year later, averaging gains of nearly 14%.

The shorter term is less predictable: in 11 of those 22 instances, stocks fell in the month following the cut. Kobeissi argues this time could follow a similar pattern — initial turbulence followed by longer-term gains as rate relief amplifies the momentum behind assets like equities, bitcoin and gold.

The broader setup explains why traders are watching the Sept. 17 announcement closely.

Cutting rates while inflation edges higher and stocks hover at records risks denting credibility, yet staying on hold could spook markets that have already priced in easing. Either way, the Fed’s message on growth, inflation, and its policy outlook will likely shape the trajectory of markets for months to come.

If you’re following the markets, you’ll know the Federal Reserve is poised to cut interest rates next week to stimulate a lagging economy. While most crypto traders are jumping for joy at the thought of fresh liquidity entering the system, not everybody’s happy. The upcoming rate cut, according to some, could have a catastrophic effect on the global economy.

A Rate Cut Is ‘Bad Monetary Policy’

Economist, investor, and everybody’s favorite goldbug Peter Schiff did not mince his words, calling a rate cut a “huge mistake” in a post shared on X.

As crypto traders gear up for a potentially bullish period, Schiff warns of serious consequences that will gravely impact the economy.

His commentary is blunt. He points to recent price moves in gold and silver as clear evidence that the rate cut is being telegraphed by the markets. Schiff wrote:

“Silver just traded above $42. Gold is poised to break to a new record high. I think the precious metals are getting ready to melt up. This is an unmistakable market signal that the Fed’s upcoming rate cut is a huge mistake.”

He argues that the decision will set off a string of cuts and a return to aggressive quantitative easing, potentially with “definitive yield curve control.” Schiff claims the U.S. dollar could lose its reserve currency status as confidence in the Fed’s judgment wavers.

Peter Schiff has long pushed the view that overly easy policy will stoke inflation and put the dollar at risk. He believes that today’s environment represents the Fed’s most damaging error yet.

“Ever since Alan Greenspan rescued the stock market after the 1987 crash, the Fed has made a series of increasingly bad monetary policy mistakes.”

Why Crypto Traders Are Jubilant About a Rate Cut

Risk-on asset traders welcome rate cuts with open arms. Lower interest rates flood markets with cheap capital and loosen financial conditions, which typically results in higher prices for volatile assets like crypto.

Bitcoin, Ethereum, and altcoins tend to rally as liquidity improves, triggering a wave of buying and bullish sentiment. The CME’s FedWatch tool shows market participants almost unanimously expect a cut (93.4%), with bets on both Bitcoin and altcoins accelerating into the meeting.

Lower rates mean money can move out of safe havens and into riskier bets, which is another reason Schiff is opposed to the cut. In plain language: Traders want easy money.

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Recent cycles show crypto runs higher whenever the Fed loosens policy, and traders are already calling for a new bull market as expectations for rate cuts hit fever pitch.

Supporting a Weaker Labor Market

While Schiff sounds the alarm, many respected analysts, including teams at Goldman Sachs, BlackRock, and a 107-economist Reuters survey, see the rate cut as a necessary step to support the weakening labor market and prevent recession.

Goldman’s chief economist expects a series of small cuts, noting softer employment data and muted inflation as justification for easing. Others warn that cutting rates too fast could actually push inflation higher or weaken the dollar, backing some of Schiff’s concerns.

Jefferies strategist David Zervos suggested the Fed might need a deep 75 basis point cut, though he also cautioned that easy money could ultimately hurt by driving up prices and weakening currency fundamentals.

The upcoming Fed rate cut is a flashpoint. Schiff says it risks disaster, spiraling cuts, runaway inflation, and a weaker dollar.

Crypto traders, though, are celebrating the prospect of more easy money and the next phase in the bull run. The broader economist community remains split, weighing soft employment against inflation risk.

Whether the Fed is making a “huge mistake” or a well-timed rescue, the next move will have a lasting impact in both traditional and crypto markets

Mentioned in this article

They said the teenager might try to escape the country before sentencing, and that people he worked with could help him do it.

Recent unsealed documents revealed that Chatel pleaded guilty in Washington, DC, to participating in a 2024 scheme involving wire fraud and money laundering. The case centers on a large-scale Bitcoin theft carried out through fake tech support calls.

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According to ZachXBT’s post on X, Chatel would call victims pretending to be from a company’s help desk. He would guide them through a process that gave his team access to their accounts.

Once inside, the attackers would trick victims into revealing their crypto wallet details. They then transferred the funds from Gemini

$328.55M

Authorities stated that Chatel used professional money launderers to hide the stolen funds. Along with his co-conspirators, Malone Lam and Jeandiel Serrano, he spent the money on watches, designer clothing, and several cars.

When the FBI searched his home, they found about $37 million in crypto connected to the heist. Officials also believe he defrauded around 50 more people, which generated another $3 million for himself.

As part of his plea deal, Chatel agreed to give up luxury goods purchased with the stolen money. He is expected to face between 19.5 and 24.5 years in prison, along with a fine that could range from $50,000 to $500,000.

Meanwhile, Global Ledger and Recoveris, in collaboration with Reuters, recently found that Russia’s Federal Security Service (FSB) has been using Bitcoin to pay a Canadian teenager. What was the FSB’s motive? Read the full story.

A Connecticut man involved with a massive theft of Bitcoin (BTC) from a Washington, D.C. victim reportedly pleaded guilty to fraud and money laundering conspiracy charges.

ABC News reports that Veer Chetal, who is among the three men charged with siphoning 4,100 BTC worth $243 million in an elaborate scam last August, also agreed to testify against his co-defendants, Malone Lam and Jeandiel Serrano.

Authorities say that the trio engaged in online social engineering attacks targeting cryptocurrency holders. Lam would send fake alerts to victims about unauthorized attempts to access their crypto accounts. Chetal and Serrano would then call and pose as representatives from companies like Google and Yahoo in an effort to access victims’ accounts.

Prosecutors say that Chetal, Lam and Serrano lived large after the heist, spending millions on cars, jewelry, rental mansions and nightclub parties.

But a week after the theft, Chetal’s parents were abducted in a botched ransom scheme. The suspects planned to demand payment from Chetal, believing he held large amounts of cryptocurrency.

But the abductors were arrested quickly after the police responded to eyewitness calls. An off-duty FBI agent also happened to be passing by just as the kidnapping unfolded.

Unsealed court documents also show that Chetal is being accused of playing a role in 50 similar heists that siphoned $3 million from victims between November 2023 and September 2024.

Chetal now faces up to 24 years in prison, a fine ranging from $50,000 to $500,000 and restitution to the victim.

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The US Department of Justice (DOJ) has announced that five men have pleaded guilty to a Cambodian-based crypto investment scam that conned victims out of $36.9 million.

In a new press release, the DOJ says the international crime ring operated by misleading victims to invest in false digital asset scams.

The DOJ says Joseph Wong, Yicheng Zhang, Jose Somarriba, Shengsheng He and Jingliang Su were part of an international criminal network that tricked American victims into believing they were investing in digital assets, but instead funneled money through US shell companies, international bank accounts and crypto wallets.

Through texts, phone calls, social media and dating apps, the perpetrators contacted victims and gained their trust. They would then convince victims to invest in fraudulent crypto projects, telling the victims all the while that their investments were increasing in value.

Instead of investing their capital, however, the men transferred $36.9 million in victim funds to a single account at Deltec Bank in the Bahamas under the name of “Axis Digital Limited.”

The funds were then funneled to USDT wallets controlled by individuals in Cambodia.

Aside from the five men pleading guilty, eight other co-conspirators have also confessed, so far.

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US authorities arrested an Atlanta man this week on charges related to his alleged connection to a COVID-19 relief loan application fraud ring.

The Department of Justice (DOJ) alleges that Ian Patrick Jackson, 37, conspired with another Atlanta man to recruit at least nine business owners to submit fraudulent Paycheck Protection Program (PPP) loan applications using fake tax documents.

Jackson allegedly told the business owners to falsely claim they each employed 16 individuals and paid monthly wages of $120,000. The DOJ says the owners then wrote falsified payroll checks to people who didn’t work for them and then either kept the money for themselves or paid Jackson via his co-conspirator.

Jackson is allegedly connected to 15 fraudulent COVID-19 relief loan applications that inked $3.39 million in proceeds. He’s the 12th person to be charged in connection with an Atlanta-based PPP fraud ring, with the 11 previous defendants having already pled guilty or been convicted at trial. The DOJ says authorities have recovered nearly $1.2 million of the defrauded funds.

Jackson also allegedly applied for a separate $237,500 PPP loan using fabricated tax forms and used a forged driver’s license and false revenue statements to fraudulently apply for approximately $100,000 in PPP and Economic Injury Disaster Loan (EIDL) program loans. The DOJ also says he fraudulently secured another $240,035 PPP loan and $125,000 in EIDL program loans and grants on behalf of another company.

Jackson has been charged with conspiracy to commit bank fraud, two counts of bank fraud, two counts of wire fraud and two counts of money laundering. The charges could result in decades in prison.

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