The Federal Reserve Open Market Committee (FOMC) declared a 25 basis point interest rate reduction on Wednesday, lowering the target Federal Funds rate to 3.75%-4%.
This rate cut was “fully priced in” by investors, who largely expected the decision, according to Matt Mena, a market analyst at 21Shares. Mena also predicted:
“November has historically been one of Bitcoin’s best months, showing positive returns in 8 of the last 12 years, averaging 46.02%. Overall, we maintain a moderately risk-on stance and see a feasible path for Bitcoin to surpass its all-time high before year-end.”
Following the FOMC announcement, asset prices stayed flat or declined slightly, with Bitcoin (BTC) down approximately 2.4% at the time of writing, after Federal Reserve Chair Jerome Powell’s remarks indicated divisions among FOMC members regarding a potential December rate cut.
“The unanticipated hawkish dissent from a regional Fed president emphasizes that future decisions are becoming increasingly contentious,” stated Michael Pearce, deputy chief US economist at Oxford Economics, in comments provided to Cointelegraph.
The rising dissent within the FOMC suggests a divided Fed, which could potentially suppress crypto prices by limiting the liquidity that might flow into digital and other risk assets.
Related: US Bitcoin and Ether ETFs recover as Powell hints at rate cuts
Market participants evaluate the chances of further rate cuts in 2025
The Federal Reserve commenced the 2025 rate-cutting cycle in September with an initial 25 basis-point cut, which contributed to BTC prices reaching all-time highs above $125,000.
More than 56% of market participants expect the Fed to reduce interest rates to a target range of 3.5%-3.75% in December, according to data from the Chicago Mercantile Exchange (CME).
In September, several major commercial banks, including Bank of America, Citigroup, and Goldman Sachs, projected at least two rate cuts in 2025.
While such cuts would generally uplift asset prices, the anticipated reductions may be overshadowed by uncertainties stemming from trade tensions between China and the US, leading to investor hesitancy.
Magazine: Crypto traders ‘fool themselves’ with price predictions: Peter Brandt
