The Federal Reserve cut its benchmark interest rate by 25 basis points to 3.75-4.00% on Wednesday, marking the second rate cut this year.
The central bank said economic growth remains subdued, while job growth has slowed and unemployment has risen. However, inflation remains “somewhat high,” making the Fed cautious about further policy easing.
Fed balances inflation and labor market risks
The decision also confirmed that the Fed will do so End quantitative tightening on December 1as a result of which the balance sheet reduction was halted earlier than expected.
The statement highlighted growing downside risks to employment, a shift from previous meetings that focused mainly on inflation.
The Fed said it will assess future policy “based on incoming data” and the “balance of risks” for its dual mandate.
Chairman Jerome Powell and most committee members supported the move, while two dissented. Stephen Miran backed a deeper cut of 50 basis points, citing weaker jobs data.
Economic context
Available indicators show this growth continues at a moderate pacebut the most important labor measures are being softened. The the unemployment rate remains lowalthough the Fed acknowledged that it has risen slightly since the summer.
Inflation has increased since early 2025, reinforcing concerns that prices could remain above the 2% target for longer than expected.
Futures markets are now pricing a 70% chance of another 25 basis point cut in December.
However, Powell is expected to emphasize a data-driven approach during the press conference.
Outlook for crypto markets
The policy change is possible strengthen risk appetite in the short term. Bitcoin and major altcoins often benefit when liquidity increases and bond yields fall.
Major KOLs like MicroStrategy’s Michael Saylor and Robert Kiosaki previously predicted Bitcoin’s price would top $150,000 by the end of 2025.
However, persistent inflation could limit broader enthusiasm. If inflation expectations rise again, risky assets – including cryptocurrencies – could come under renewed pressure from stronger dollar flows.
Crypto market does not respond to expected interest rate cuts. Source: CoinGeckoAnalysts say the balance between easing and inflation will determine the next phase of the crypto market.
Continued liquidity support could lift Bitcoin above key resistance levels, while a hawkish tone in December could wipe out these gains.
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