The U.S. Federal Reserve just made a big move. They cut interest rates for the first time in nine months. This was a quarter-point reduction, exactly 0.25%. This decision aligns with what most markets expected. It’s the first rate cut we’ve seen this year, and the first since December 2024.
The new target range for the federal funds rate is now between 4.00% and 4.25%. Before this, the rate had sat between 4.25% and 4.50% since last year. There was mostly agreement among the policymakers. However, one voice stood out from the consensus. Stephen Miran, a governor recently confirmed and appointed by President Donald Trump, voted differently.
Miran has been pushing for rate cuts since he started his term in January. He argued for a bigger, half-point reduction instead of the quarter-point cut. This detail was reported by CNBC. Before the Fed’s announcement, market watchers were quite sure about this move. CME’s FedWatch tool showed a 96% chance of a 25 basis point cut, while a larger 50 basis point cut seemed almost impossible.
🚨📉 FED cuts rates 0.25%
Fund rate between 4.00% and 4.25%
Officials project two more cuts in 2025
Labor market slows; inflation increases
Bitcoin almost no reaction, ~USD 115,367, -0.9% 24h pic.twitter.com/hdooXaRGSi— Diario฿itcoin (@Blaze Trends)
The Fed’s statement explained their reasoning. They noted a “slowdown” in the job market recently, which meant fewer jobs were appearing. This marks a change from their July meeting, when the bank described the labor market as “solid,” according to the BBC. The Federal Reserve also warned that inflation risks are still present, pointing out that prices have “increased.” But despite this, they projected more cuts for this year. The Fed’s “dot plot” suggests most officials foresee two more quarter-point cuts in 2025. Traders are now waiting eagerly for comments from Fed Chairman Jerome Powell. They hope he will shed light on what comes next for monetary policy.
Bitcoin barely moves, stays bearish
Now, let’s look at Bitcoin. Cryptocurrencies are often seen as risk assets. They usually do well when money policies loosen up. But Bitcoin barely moved immediately after the Fed’s news. It stayed in its bearish zone, below $116,000. Over the past 24 hours, Bitcoin saw a small dip, losing 0.9%. Data from CoinGecko confirms this.
Before the decision, Bitcoin’s price action had paused. It even backed off from a four-week peak above $117,000 earlier that morning (ET). Why the quiet reaction? Investors might be playing it safe. They’re probably waiting to hear Powell’s thoughts on the economy. They want to know the bigger picture for monetary policy. Another idea is that everyone already expected this 25-point cut. Juan Leon, a senior strategist at Bitwise, had warned it was “practically priced in.”
At the time of writing, Bitcoin trades around $115,367. That’s about 7% lower than its all-time high. Just last month, it hit over $124,000.