Fed Cuts Rates by 25 bps; Bitcoin Slips as Traders Eye Powell’s Guidance
The U.S. Federal Reserve delivered an expected 25 basis point rate cut on Wednesday, lowering the federal funds rate to a range of 3.75%–4.00% while signaling plans to end its balance sheet reduction program on December 1, marking a formal conclusion to the quantitative tightening phase.
In its statement, the central bank noted that “job gains have slowed this year, and the unemployment rate has edged up but remained low through August.” Inflation, it added, “has moved up since earlier in the year and remains somewhat elevated.”
The decision wasn’t unanimous. Kansas City Fed President Jeffrey Schmid voted to keep rates unchanged, while Governor Stephen Miran favored a larger 50 basis point cut, reflecting growing divergence within the Federal Open Market Committee (FOMC) over the pace of policy easing.
Bitcoin (BTC) extended earlier losses following the announcement, hovering near $111,700, down roughly 3% over the past 24 hours after briefly dipping toward $110,000. The decline mirrored broader risk-off sentiment across digital assets as traders awaited Chair Jerome Powell’s remarks at 2:30 p.m. ET, seeking insight into the Fed’s outlook on inflation, growth, and the trajectory of future rate cuts.
Traditional markets were steady. The Nasdaq Composite advanced 0.5%, leading U.S. equity benchmarks, while the 10-year Treasury yield climbed three basis points to 4.02%. The U.S. dollar strengthened modestly in response to the Fed’s cautious tone.
Futures markets now imply another 25 basis point cut at the Fed’s December meeting, suggesting traders expect the central bank to maintain a gradual approach to easing as economic data continues to moderate.
