Federal Reserve Cuts Interest Rates Amid Labor Market Concerns

Mitsubishi UFJ Financial Group reports the Federal Reserve’s decision, with a 9-3 vote, to cut interest rates by 25 basis points, citing cooling labor markets and inflation risks.

The Fed’s cautious rate cut impacts global markets, suggesting restrained monetary policy could influence future economic growth and investment strategies, affecting risk assets including cryptocurrencies.

Federal Reserve Rate Cut Sparks Mixed Market Reactions

The Federal Open Market Committee decided to lower the target federal funds rate by 25 basis points to 3.50–3.75%. Key figures, including Jerome H. Powell and John C. Williams, supported this move. The decision highlights growing concerns over labor market cooling and inflation persistence.

Markets reacted with caution, as the Federal Reserve emphasized observing economic conditions carefully. Despite the cut, hawkish signals for 2026 disappointed some market participants who expected a more dovish approach. Federal Reserve’s future policy direction is surrounded by uncertainty, with expected leadership changes.

“The Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 3‑1/2 to 3‑3/4 percent.” — Jerome H. Powell, Chair, Federal Reserve Board

Market players and crypto enthusiasts expressed mixed reactions to the Federal Reserve’s hawkish stance. The recent meeting’s decision emphasized data reliance, leaving bitcoin and other cryptocurrencies vulnerable to macroeconomic sentiment shifts and overall liquidity conditions. Analysts are closely watching Powell’s signals to predict future movements.

Bitcoin Prices and Crypto Market Analysis Following Fed’s Decision

Did you know? In 2019, a similar Federal Reserve easing cycle occurred with internal dissent, reflecting the current divided FOMC. This past cycle also impacted macro risk assets, including cryptocurrencies.

Bitcoin (BTC) has seen notable price changes recently. As of December 11, 2025, BTC traded at $89,766.29, with a market cap of $1.79 trillion. The past 24 hours recorded a 2.87% decline, while trading volumes surged to $69.33 billion, as reported by CoinMarketCap.

Coincu research team highlights that the Federal Reserve’s decisions continue to sway market directions through economic sentiment and liquidity conditions. Predictions are tentative, with effects likely to ripple through financial and technological sectors amid uncertain regulatory landscapes.