Fed Delivers Expected Cut, but Divisions Emerge
The Federal Open Market Committee (FOMC) on Wednesday delivered a 25 basis point interest rate cut, lowering the Federal Funds target range to 3.75%–4%. While the decision technically marks the second cut of 2025, it barely moved markets - a sign that investors had already priced it in.
Despite the optimism, the Fed’s tone was less dovish than expected. Chair Jerome Powell hinted at division within the committee, dampening hopes for another cut in December.
Bitcoin Slips as Market Reacts to “Hawkish Dissent”
Bitcoin briefly dipped 2.4% following Powell’s remarks, trading around $121,500 at press time.
The split signals a deeply divided central bank as it tries to balance inflation control with recession risks - a tension that could tighten liquidity for risk assets like crypto.
Market Bets on More Cuts Ahead
According to data from the Chicago Mercantile Exchange (CME), 56% of traders expect another 25bps cut in December, which would push the Fed’s target to 3.5%–3.75%.
Commercial banking giants - including Bank of America, Citigroup, and Goldman Sachs - are forecasting at least two cuts in 2025, though analysts caution that global trade tensions could blunt their impact.
The first rate cut in September helped drive Bitcoin to record highs above $125,000, but that momentum has since cooled as macro uncertainty returns.
Crypto Faces “Liquidity Drought” If Fed Stays Split
Analysts warn that the Fed’s internal disagreements could stall liquidity flows that typically fuel crypto rallies.
Still, Bitcoin bulls see upside potential if the Fed stays on a cautious easing path. Historically, lower interest rates tend to boost digital assets - but only if accompanied by clear forward guidance.
Outlook: Fed’s Uncertainty Could Define Q4 Market Sentiment
With inflation moderating but still above target, and trade tensions rising between the U.S. and China, the Fed’s December meeting is shaping up to be one of the year’s most consequential. If another cut materializes, it could rekindle crypto’s year-end rally - but if dissent deepens, expect more sideways action across both traditional and digital markets
