The U.S. Economy and the Crypto Market: Opportunities Arising from Changes in Monetary Policy

Recently, the U.S. economy has shown a complex situation; on one hand, GDP data performs reasonably well, while on the other hand, the employment market appears to be showing signs of fatigue. Meanwhile, calls for the Federal Reserve to cut interest rates are growing louder. For cryptocurrency investors, these economic trends are worth close attention, as the Federal Reserve's monetary policy has always been one of the key factors affecting the crypto market.

US Economy: Stable on the Surface, but Actually Slowing?

The latest GDP data appears impressive: the annualized quarter-on-quarter growth for the second quarter of 2025 reached 3.0%, a significant improvement from the previous quarter's -0.5%. However, deeper analysis reveals that this rebound is somewhat inflated. Imports have plummeted by 30.3%, which actually reflects the retreat of the stockpiling wave caused by previous tariff increases, with clear signs of cooling demand.

The "Private Domestic Final Sales" (consumption + private investment) indicator, which better reflects economic vitality, has fallen to 1.2%, the lowest since 2022. Service sector spending has also dropped below 2% year-on-year, indicating that consumer spending is becoming more cautious.

The performance of the job market is more direct. In July, non-farm employment increased by only 73,000, and the data for the previous two months was revised down by 258,000. The average new employment in the last three months was only 35,000, the lowest level since June 2020. The labor participation rate fell to 62.2%, and the unemployment rate rose to 4.2%. Currently, the job market is in a state of "low job-seeking, slow hiring, and cautious layoffs," with most industries contracting except for the education and healthcare sectors.

Federal Reserve: Expectations for Interest Rate Cuts Rise, More Easing Possible in 2026

The Federal Reserve Chairman's attitude has clearly softened recently. After the July FOMC meeting, he specifically emphasized "downside risks to employment," suggesting that monetary policy will shift from "restricting the economy" to "neutral," which essentially means that a rate cut cycle is approaching.

According to the current economic data, interest rate cuts may begin as early as September. This is in stark contrast to the situation during the trade war in 2018 when the Federal Reserve was still raising interest rates, whereas this time it is likely to adopt a loose monetary policy to counteract the impact of tariffs, which is undoubtedly good news for the crypto market.

What is more concerning is the change in the Federal Reserve's voting committee in 2026. From the current roster, it is evident that the dovish forces have significantly strengthened: several newly appointed voting members tend to adopt loose policies to support economic growth. Even those regarded as hawkish representatives are taking a more moderate stance. This structure of the voting committee suggests that 2026 may welcome a more accommodative monetary policy environment, and an increase in liquidity typically stimulates the rise in crypto asset prices.

Key Economic Data Worth Paying Attention To

A series of important economic data will be released in mid-August, which may have a significant impact on the price trends of cryptocurrencies:

• August 12: U.S. Core CPI (expected monthly increase of 0.2%)
• August 14: Unemployment benefit applications (expected 226,000)
• August 15: Retail sales (expected monthly increase of 0.6%) and University of Michigan Consumer Sentiment Index (expected 61.7)

These data will directly reflect the economic climate and inflation trends, thereby influencing the Federal Reserve's policy decisions.

For cryptocurrency investors, the current situation is logically clear: the cooling of the U.S. economy combined with the Federal Reserve's imminent shift to easing is likely to improve the market liquidity environment. While short-term volatility is inevitable, in the medium to long term, the shift in monetary policy direction may be more worthy of attention than a single policy. After all, in the crypto market, the increase in liquidity has always been the strongest bullish logic.