TLDR
- The Federal Reserve’s Open Market Committee cut interest rates by 25 basis points on Wednesday.
- The new target range for the Federal Funds rate is now between 3.75% and 4.00%.
- Investors had already anticipated this rate cut, which limited its immediate market impact.
- Bitcoin fell 2.4% after the FOMC rate cut announcement and Jerome Powell’s comments.
- The current price of Bitcoin is around $111,514, after a brief market decline.
The Federal Reserve Open Market Committee (FOMC) cut the Federal Funds rate by 25 basis points on Wednesday. The rate cut lowers the target range to 3.75%-4%, confirming market expectations.
Bitcoin Sees Pressure After FOMC Decision
Bitcoin fell 2.4% after FOMC rate cut and Jerome Powell’s comments after the meeting. The asset is now trading at $111,514 as investor confidence is mildly dented by future political uncertainty. While the FOMC rate cut was praised, Chairman Powell’s tone hinted at internal disagreements. He stated that some committee members are opposed to another rate cut in December, despite broader expectations.
“Future moves are becoming more contested,” Michael Pearce of Oxford Economics said in a statement. He cited dissent from a regional Fed president after Wednesday’s decision. That divergence dampened short-term optimism, causing crypto assets like Bitcoin to react negatively. Market observers said liquidity concerns could pressure prices if the FOMC delays further action.
November Trend May Still Favor Bitcoin
Despite the withdrawal, Bitcoin has historically performed well in November, returning an average of 46.02% over 12 years. Matt Mena of 21Shares said Bitcoin may still have a path to new highs before the end of the year. He added, “We remain moderately risk-averse,” citing seasonal strength and market expectations following the FOMC rate cut. Bitcoin’s future movement may depend on the next policy signal from the Fed.
The FOMC initiated the 2025 easing cycle in September, which helped Bitcoin rise above $125,000. Since then, expectations for interest rate cuts have been stable for all risk assets. Still, the FOMC’s internal rift over upcoming decisions complicates the market’s predictions for December. Chairman Powell paused to confirm additional moves, reinforcing caution.
Over 56% of traders expect another FOMC rate cut to 3.5%-3.75% in December, according to CME FedWatch tool. This consensus suggests that investor positioning is already aligned with near-term political forecasts.
Major banks, such as Citigroup and Goldman Sachs, continue to forecast two more FOMC rate cuts in 2025. These institutions expect further easing to support borrowing and capital flows across the markets. However, some uncertainty remains due to renewed trade tensions between the US and China affecting investor behaviour. Such concerns may limit the impact of future FOMC rate cuts on risk asset prices.
