The Fed policy narrative shifted as Powell underscored persistent labor-market resilience while downplaying inflation concerns. The dollar index dropped about 0.4%, its largest decline in months, after the central bank cut rates by 0.25 percentage points.

Bank of America strategist Alex Cohen noted that Powell’s labor-market outlook appears less optimistic than earlier forecasts, with his remarks on labor and inflation sparking the dollar’s fall. Macro strategist Edward Harrison added that the stance diverges from hawkish peers, implying bond yields and rate differentials will guide direction.

For crypto markets, the softer dollar index and policy divergence could support risk sentiment, with Bitcoin and select altcoins potentially tracking higher liquidity expectations. Traders will monitor bond yields and rate differentials as macro cues flow from the policy path and inflation outlook.