Federal Reserve Lowers Interest Rates by 0.25%
The Federal Reserve cut interest rates by 25 basis points on Wednesday. This move met market expectations. It is the Fed’s first rate cut in 2025.
Policymakers expect two more rate cuts this year. These cuts would total 50 basis points. The decision reflects concerns about the labor market and slower economic growth.
Crypto Market Reacts Calmly to Fed Decision
Bitcoin (BTC) and most top cryptocurrencies showed little change after the rate cut. Bitcoin traded around $116,000 at the time of the announcement. It had briefly risen above $117,000 before the meeting.
Altcoins like Ethereum (ETH), XRP, BNB, and Solana (SOL) gained slightly, each rising just over 2%. The muted response suggests investors had already expected the cut.
Fed Statement and Market Outlook
The Federal Open Market Committee said economic growth slowed in the first half of 2025. Job gains have decreased, and unemployment has risen slightly but remains low. Inflation is still somewhat high.
Governor Stephen Miran, newly sworn in, was the only member to vote for a larger 50 basis point cut. Six officials voted against any cuts, while nine supported two more quarter-point cuts this year.
Lower interest rates often make traditional investments like government bonds less attractive. This can lead investors to seek higher returns in stocks and cryptocurrencies.
The S&P 500 index also showed little movement after the Fed’s decision. Historically, the S&P 500 has ended the month lower half of the time after a rate cut. However, it tends to gain about 15% one year later when near all-time highs. This trend may influence Bitcoin, which has become more correlated with the stock market in recent years.
