Federal Reserve Confirms 25bp Rate Cut at October Meeting

Federal Reserve Governor Christopher Waller has indicated a potential 25 basis point interest rate cut at the upcoming FOMC meeting, aligning with the majority’s perspective.

The anticipated rate cut could influence risk assets, including cryptocurrencies, potentially fostering increased volatility and positive market sentiment.

Federal Reserve’s 25bp Cut and Market Reactions

Federal Reserve took decisive action by lowering the interest rate by 25bp to range between 4% and 4.25%. Governor Waller and other notable members like Jerome Powell supported this decision.

The rate cut aims to stimulate economic activity. This adjustment impacts various sectors, especially equity and cryptocurrency markets, which often respond positively to easing monetary policies.

“In support of its goals and in light of the shift in the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 4 to 4-1/4 percent.” – Jerome Powell, Chair, Federal Reserve.

Bitcoin Volatility Amid Rate Adjustments

Did you know? The last major series of interest rate cuts by the Federal Reserve during the mid-2020 pandemic showed a similar trend, providing increased liquidity and aiding risk asset rallies.

Bitcoin (BTC) currently trades at $111,315.44 with a market cap of $2.22 trillion, showing a decreased market dominance of 58.69%. It experienced a 0.64% drop over the past 24 hours, according to CoinMarketCap. Additionally, a negative 11.70% change was noted in 24-hour trading volume, highlighting market caution.

The Coincu research team predicts potential for increased crypto market volatility tied to the rate cut. Bitcoins’ typically correlates with high-beta assets, suggesting future price fluctuations as participants adjust to new economic conditions.