The Federal Reserve has implemented its much-anticipated decision, reducing rates by 25 basis points while keeping the possibility of further cuts open.
Summary
- The FOMC has lowered interest rates by 25 basis points, with the potential for additional cuts ahead
- While this decision was largely expected, it carries a tone of easing
- Bitcoin and altcoins may respond moderately
The Federal Reserve’s much-anticipated decision was announced on Wednesday, September 17. The Federal Open Market Committee opted to lower interest rates for the first time in 2025. Rates will decrease by 25 basis points, from a range of 4.25%–4.50% to 4.00%–4.25%, as anticipated.
The Fed indicated that it remains open to further interest rate reductions. However, Chair Jerome Powell did not provide a definitive direction regarding a commitment to additional easing but chose to maintain flexibility.
Nonetheless, the Fed chair expressed increasing concerns regarding employment and economic growth. This marks a significant tonal shift and may imply that the Fed is more inclined to lower rates in the future. Moreover, one FOMC member, according to Bloomberg, dissented, advocating for a 50-basis-point cut. Although not officially confirmed, the dissenter is likely Trump appointee Stephen Miran.
Implications of the Fed’s decision for Bitcoin and altcoins
Interest rates significantly impact asset prices. A reduction in interest rates diminishes the yields of fixed-income assets such as bonds and Treasuries, while concurrently lowering borrowing costs, making riskier assets, including Bitcoin and particularly altcoins, more appealing.
Since the Fed’s decision was largely expected, it’s unlikely to create a significant impact on cryptocurrency prices. However, a more dovish outlook on inflation and interest rates may lift Bitcoin prices and further enhance altcoin values.
