Fed Cuts Rates by 25 bps, Markets React Positively

The Federal Reserve, led by Chair Jerome Powell, cut the federal funds rate by 25 basis points during the December 2025 meeting, signaling market relief in New York.

This rate cut indicates a shift in monetary policy, suggesting a potential end to rate hikes and influencing market optimism for future easing measures.

Fed’s Dovish Stance Spurs Market Optimism

Federal Reserve Chair Jerome Powell announced the cut to the federal funds target range to 3.50%–3.75%, reflecting shifts in risk assessment. The decision aligns with prior reductions in 2025, underlining the committee’s data‑dependent strategy. Powell’s commitment to evaluate economic conditions at each meeting reinforces this stance.

The rate cut signifies the end of the hiking cycle, shifting towards potential easing. Monetary policy flexibility remains, with Powell highlighting that further changes rely on incoming data and risk balances. This approach calms markets, boosting investor confidence and financial stability.

“Monetary policy is not a fixed path set in advance; we will make decisions step by step based on the situation at each meeting.” – FOMC Press Release, December 10, 2025

Cryptocurrency Markets Poised for Liquidity Surge

Did you know? The Federal Reserve’s December 2025 dovish pivot echoes its 2019 mini-easing cycle, where rate cuts spurred market rallies, particularly benefiting high-beta assets such as cryptocurrencies.

Bitcoin (BTC) currently stands at $92,117.07, holding a market cap of $1.83 trillion and a market dominance of 58.35%. Over the last 24 hours, trading volume decreased by 2.81%, closing at $65.43 billion. Prices dipped by 0.79% in 24 hours and 20.15% in 90 days, according to CoinMarketCap data.

Insights from the Coincu research team reveal potential increases in crypto liquidity due to enhanced market conditions. Historical data suggests dovish Fed decisions lead to bullish phases for high-beta cryptocurrencies, including Bitcoin and Ethereum, as liquidity expectations improve. Federal Reserve crypto markets impact may indicate upcoming trends.