Federal Reserve Expected to Cut Rates Amid Monetary Easing

Morgan Stanley predicts the Federal Reserve will reduce interest rates by 25 basis points to 3.75%-4.00%, impacting financial and digital asset markets.

This signals ongoing monetary easing, potentially boosting Bitcoin and Ethereum inflows while affecting dollar valuation.

Federal Rate Cut’s Influence on Crypto Markets and USD

Morgan Stanley predicts the Federal Reserve will cut rates by 25 basis points to a range of 3.75%-4.00% amid continued monetary easing by 2025. Rate decisions impact both economy and crypto sectors, reflecting Fed’s ongoing adjustment strategy. Lower interest rates could fuel speculative investment into higher-risk assets like cryptocurrencies. “Morgan Stanley predicts continued dollar depreciation amid rate cuts, with implications for cross-asset and crypto valuations,” Morgan Stanley Prediction.

The projected rate cut comes with predicted implications for cross-asset valuations, potentially triggering favorable conditions for digital assets. Market outlook reflects growing speculation over extended asset inflows to BTC and ETH, due to enhanced risk appetites under reduced rates.

Industry observers note that while lower rates stimulate risk-asset interest, no confirmed increases in crypto trading volume or significant DeFi activities have been observed yet. The Federal Reserve’s monetary policy decisions remain closely watched, shaping investor sentiment across multiple market segments in forthcoming mitigation strategies.

Historical Impact on BTC and ETH Amid Fed Policies

Did you know? Historically, Federal Reserve rate cuts have driven increases in BTC and ETH demand, but it often takes several weeks before noticeable spikes are recorded in trading volumes.

Bitcoin (BTC) trades at $113,811.29, with market cap reaching 2.27 trillion as of October 28, 2025. CoinMarketCap reports a 24-hour trading volume of 58.66 billion, showing a 1.42% price drop and a 5.50% gain over seven days. Current supply stands at 19,940,981 BTC.

Analysts indicate that Federal Reserve policies contribute to varied financial repercussions across assets. Historically, lower interest rates encourage alternative investments, inclining institutional appeals towards cryptocurrencies. The Coincu research team projects continued fluctuations across crypto markets, subject to Fed’s successive policy adjustments.

[Jay Bacow, Co-Head of Securitized Product Research, Morgan Stanley](https://www.morganstanley.com/insights/articles/fed-rate-cut-mortgage-rate-impact-2025), commented on broader rate policy, “We don’t think that the Fed cutting rates as the market expects is sufficient cause for the 30-year fixed mortgage rate to come down.”