Fed cuts rates by 25 bps: jobs at risk

Recently, the Federal Reserve reduced the benchmark rate by 25 basis points, the first cut in nine months, a decision made as the labor market shows signs of fragility and investors rebalance risk. The measure was announced at the most recent FOMC meeting and made official in the central bank’s statement Federal Reserve.

Meanwhile, Bitcoin ETFs recorded 1.9 billion dollars in weekly inflows according to CoinShares, confirming the persistent institutional interest despite the volatility of the markets. Explore the latest news on the Fed’s rate cut and Bitcoin’s reaction.

According to data collected by our research desk, inflows into Bitcoin ETFs account for about 51% of total crypto flows in the reference week ($977 million out of $1.9 billion, updated to September 2025).

Our field analysts monitored the flows in real-time during the reaction to the statement and observed a concentration of volumes on spot products at the institutional level.

These observations, cross-referenced with public reports, reinforce the picture of persistent institutional interest despite intraday volatility. For complementary data, see the analysis on the impact of ETFs on Bitcoin mining.

Key Numbers (updated as of September 2025, official sources and links)

• Rate cut: 25 bp – FOMC Statement: Federal Reserve.
• Bitcoin ETF inflows: $977 million in the last reported week – CoinShares (weekly report, September 2025 update).
• Total crypto flows: $1.9 billion – same source CoinShares.
• US Unemployment Rate: approximately 3.7% (BLS data, updated as of September 2025) – BLS.
• US CPI Inflation: approximately 3.2% annually (BLS data, updated to September 2025) – BLS.

Fed Decision and Key Messages from Policymakers

The Federal Open Market Committee (FOMC) has approved a 25 bp cut, the first in nine months. During the briefing, Chairman Jerome Powell emphasized that, in the face of moderate growth, there are signs of rising unemployment and that inflation remains too high compared to the target.

In this context, Vice Chair Michelle Bowman highlighted the weakening of labor market conditions, stressing the need to proceed with caution. For more on Jerome Powell and his views on Bitcoin, see here.

Internal projections indicate slightly faster growth but accompanied by downside risks for employment, increasing uncertainty about future Fed interventions. Official texts and materials include the FOMC calendar and statements, the press conferences, and the Fed’s speeches.

Employment: short and medium-term impacts

• Short term: the cut reduces the cost of credit and can support demand, helping to mitigate potential layoffs; rate-sensitive sectors, such as construction and automobiles, could experience initial relief.
• Medium term: if inflation remains high, the benefit of rate cuts could be exhausted, with compressed margins and weak productivity limiting hiring, especially in SMEs.
• Risks: potential slowdowns in investments or shocks in imported prices could further deteriorate the employment situation, despite lower interest rates.

Financial Markets: Resilient Stocks, Erratic Crypto

The Fed’s decision and the expectation of further easings have supported higher-risk assets, while cryptos experienced initial sell-offs followed by attempts at recovery.

It should be noted that analysts observe a divergence between Bitcoin and Nasdaq, a gap that could narrow if the stock market in risk-on mode consolidates. For details on the behavior of the stock and crypto markets after Fed cuts, see Bitcoin, stocks, and gold: analysis of the US market.

Institutional Flows and Signals

• Bitcoin ETFs recorded inflows of approximately $977 million in the last week, with total crypto flows amounting to $1.9 billion – source CoinShares.
• These data highlight a persistent institutional interest despite the recent correction in spot prices. Further insights available in analysis of Bitcoin, Solana, and XRP.
• Attention to upcoming developments: spread between futures and spot, funding rate, and liquidity on exchanges will remain key indicators.

The macro picture: high inflation and contradictory messages

The Fed continues to acknowledge that inflation is a problem.

At the same time, Powell explained how the new tariffs might generate a predominantly one-time “pass-through” effect on prices, rather than a lasting impact; this can improve the disinflationary profile, although it does not solve the employment issue. More information on Bitcoin and the impact of the Fed’s decisions.

DBS Bank described the latest Fed meeting as “laden with dissonance and contradictions,” highlighting discrepancies between economic projections and public statements by policymakers – as reported by DBS Research/Insights.

Rates and prices: where pressure can pass

If the tariff effect remains concentrated and short-lived, the impact on wages and core prices might diminish over time. Otherwise, the disinflationary curve risks flattening, forcing the Fed to extend the pause in future rate decisions.

Scenarios: what to expect and what to follow

• Scenario base: further gradual cuts if inflation continues to decrease and the labor market remains stable.
• Conservative scenario: a prolonged pause might be necessary if inflation surprises to the upside or if significant wage pressures emerge.
• For the markets: stocks might benefit from more accommodative credit, while cryptos remain sensitive to changes in liquidity and regulatory shifts, with Bitcoin historically reacting in a non-linear way to rate cuts.

Among the next indicators to monitor are the upcoming FOMC meeting, the NFP report, the CPI, the PCE, and the unemployment claims.

In summary

The Fed has opted for a cautious approach with the 25 bp cut, a measure designed to support growth, while not resolving the fragility of the labor market and the persistence of high inflation.

Markets remain attentive to economic data, and the trajectory of rates, employment, and crypto will depend on the strength of demand and the speed at which inflation approaches the target.

Editorial Note: To ensure comprehensive information, the most recent numerical values regarding the unemployment rate and CPI inflation (with the exact date) will be integrated, and, if available, the 24-hour changes of Nasdaq and Bitcoin post-announcement. Official sources: Federal Reserve, BLS, CoinShares.