Global markets are fixated on Federal Reserve chair Jerome Powell's address at Jackson Hole today, a speech expected to influence both the near-term policy outlook and investor sentiment.

What Happened: The Fed has held borrowing costs steady for five consecutive meetings despite pressure from President Donald Trump to cut rates more aggressively, and probabilities for a September move have shifted lower in recent days.

Figures from the CME FedWatch tool show the likelihood of a September cut falling from more than 85% last week to around 73%, reflecting unease after July's meeting minutes revealed concerns over stalled disinflation and ongoing tariff pressures.

This will be Powell's final Jackson Hole keynote before his term as chair ends in May 2026, adding further weight to his remarks.

Crypto markets have mirrored the caution seen in equities, with Bitcoin (CRYPTO: BTC) dipping to just under $113,000 and Ethereum (CRYPTO: ETH) holding around $4,280.

ETF flows, which had surged earlier in the summer, turned negative in recent sessions, suggesting investors are locking in profits and hedging ahead of Powell's comments.

The total crypto market cap now sits near $3.83 trillion.

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What Experts Are Saying: Iliya Kalchev of Nexo told Benzinga the current environment signals recalibration rather than structural weakness.

“Powell's remarks at Jackson Hole will set the tone for September, with even subtle hints on policy likely to move markets. A steadier hand from the Fed could provide reassurance, while a hawkish lean may extend this period of consolidation,” he said.

“Beyond today, investors will quickly turn to next week's U.S. data releases, including July new home sales on Monday, CB consumer confidence on Tuesday, and Thursday's dual update of initial jobless claims and second-quarter GDP projections,” he added.

StockTwits' Tom Bruni noted that equity weakness reflects expectations for a cautious message from Powell.

"The market is setting up for Jerome Powell's Jackson Hole speech to be negative, which is likely why the Nasdaq 100 is already down six days in a row. Last week's hotter-than-expected inflation data renewed fears that a September rate cut might be out of reach, with July's meeting minutes noting that disinflation appeared to have stalled, with tariffs putting upward pressure on goods price inflation,” he told Benzinga

Bruni added that if Powell avoids language seen as overly hawkish, "we may be setting up for a relief rally," though investors are increasingly shifting their focus to the October and December meetings.

Greg Magadini, Director of Derivatives at Amberdata, emphasized the repricing of expectations saying, "The market has repriced the probability of a rate cut from 92% certainty down to 74% after last week’s CPI and PPI showed inflation is stickier than hoped for. Combine this higher inflation with poor jobs data for July … and the Fed finds itself in a tricky situation."

He added that Powell's speech will be closely scrutinized not just for near-term direction but also for the longer-term trajectory.

"Two weeks ago the market expected the potential for 3x 0.25% rate cuts in 2025, now we expect 2x. This part of the speech around future projections from Powell will be the most closely followed aspect,” he said.

Beyond macroeconomic policy, digital assets remain sensitive to broader market positioning.

Ruslan Lienkha, Chief of Markets at YouHodler, highlighted that "Bitcoin’s weakness is currently driven primarily by macroeconomic factors," with broader selling pressure in equities spilling over into crypto.

He added that the pullback should be seen as part of a cyclical pattern rather than a structural shift, with Ethereum flows reflecting investor appetite for relative outperformance.

While crypto markets consolidate, traditional assets also reflect caution.

Gold has softened, trading near $3,328/oz, while Asian equities stayed steady as Japan's inflation held above the Bank of Japan's 2% target.

Markets now await Powell's 10:00 am ET speech, with analysts warning that even subtle signals could dictate volatility heading into September.

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