Federal Reserve’s December Rate Cut Faces Challenges

Dallas Fed President Lorie Logan announced potential difficulties in cutting interest rates in December unless significant inflation decline or labor market reductions occur, according to statements made in October 2025.

Logan’s caution has already influenced market expectations, reducing rate cut likelihood and impacting crypto assets such as BTC and ETH, aligning with historical trends of hawkish Federal Reserve guidance.

Federal Reserve’s December Rate Cut Faces Challenges

Lorie Logan, President of the Dallas Federal Reserve, has emphasized the current economic outlook does not support a rate cut. The statement highlighted challenges in achieving a December rate cut unless clear evidence of disinflation or labor market cooling emerges.

As a result, market participants have adjusted their expectations. The probability of a December rate cut fell significantly, reflecting investor caution regarding the Federal Reserve‘s monetary policy moves. Following Logan’s remarks, the market saw a modest rise in the U.S. Dollar Index and drops in rate cut probabilities. Other officials like Kansas City Fed President Jeff Schmid also support a cautious approach, underscoring persistent inflation pressures.

This economic outlook didn’t call for cutting rates. And I’d find it difficult to cut rates again in December unless there is clear evidence that inflation will fall faster than expected or that the labor market will cool more rapidly,” – Lorie Logan, Dallas Fed President, Federal Reserve.

Inflation Concerns: Impact on Crypto and Forex Markets

Did you know? The raised caution by US Federal Reserve officials often precedes temporary downturns in crypto and traditional markets, particularly during periods of extended tightening announcements.

As per CoinMarketCap, the price of Bitcoin (BTC) is currently valued at $110,835.25 with a market cap of $2.21 trillion and a market dominance of 59.32%. Trading volume saw a decrease of 38.56% over the last 24 hours, while Bitcoin’s price shifted 0.63% in 24 hours and dropped 7.77% in 30-days.

Coincu’s research team suggests that extended hawkish monetary policy by the Fed could dampen liquidity, affecting both traditional and crypto markets. Forex markets might experience increased dollar strength while crypto assets like BTC and ETH could see pressure due to reduced macro liquidity flows.