Federal Reserve Cuts Interest Rates Amid Economic Concerns
The U.S. Federal Reserve lowered its key interest rate for the first time since December. The Federal Open Market Committee voted to reduce the benchmark fed funds rate by 0.25 percentage points. The new range is 4% to 4.25%, the lowest since December 2022.
Fed officials signaled that two more rate cuts could follow this year. They project the rate to fall to 3.5% to 3.75% by December, a larger reduction than expected in June.
The decision passed with 11 votes in favor and one dissent. Stephen Miran, a recent appointee, called for a larger half-point cut. The split highlights the Fed’s challenge: lowering rates may boost hiring, but higher rates help control inflation above the 2% target.
Political Pressure and Economic Risks
Federal Reserve officials warned that President Donald Trump’s trade tariffs are slowing economic growth. They said tariffs could increase unemployment, forcing the Fed to balance inflation control with job stability.
President Trump demanded steeper rate cuts, up to three percentage points. He also tried to remove Fed Governor Lisa Cook, who voted for the quarter-point cut. This political tension adds uncertainty to the economic outlook.
For crypto markets, the mix of trade tensions and political interference may increase volatility. This environment could strengthen Bitcoin’s role as a hedge against economic instability.
Impact on Cryptocurrency Markets
Lower U.S. interest rates could boost the digital asset market. A weaker dollar and cheaper borrowing costs often lead investors to seek alternative assets like Bitcoin and other cryptocurrencies.
With two more rate cuts expected this year, liquidity may rise. This could increase demand for risk assets and support stronger institutional inflows into crypto. The Fed’s shift may set the stage for renewed price rallies in digital currencies.
