FOMC Delivers Rate Cut, But Markets Signal Trouble Ahead

TLDR

• The Federal Reserve Open Market Committee reduced interest rates by 25 basis points on Wednesday.
• The new target range for the Federal Funds rate is now between 3.75% and 4.00%.
• Investors had already anticipated this rate cut, which limited its immediate market impact.
• Bitcoin dropped by 2.4% following the FOMC rate cut announcement and Jerome Powell’s remarks.
• The current price of Bitcoin is approximately $111,514, following a brief market dip.

The Federal Reserve Open Market Committee (FOMC) reduced the Federal Funds rate by 25 basis points on Wednesday. The rate cut brings the target range down to 3.75%–4%, confirming market expectations.

Bitcoin Sees Pressure After FOMC Decision

Bitcoin dropped 2.4% following the FOMC rate cut and Jerome Powell’s post-meeting comments. The asset now trades at $111,514, as investor confidence is mildly disrupted by future policy uncertainty. While the FOMC rate cut was priced in, Chair Powell’s tone hinted at internal disagreements. He stated that some committee members oppose another rate cut in December, despite broader expectations.

“Future moves are becoming more contentious,” said Michael Pearce of Oxford Economics in stated. He cited dissent from a regional Fed president following Wednesday’s decision. That divergence reduced short-term optimism, causing crypto assets like Bitcoin to react negatively. Market observers said liquidity concerns may pressure prices if the FOMC delays further action.

November Trend Could Still Favor Bitcoin

Despite the pullback, Bitcoin has historically performed well in November, returning an average of 46.02% over 12 years.  Matt Mena from 21Shares said Bitcoin may still have a path to new highs before the end of the year. He added, “We remain moderately risk-on,” citing seasonal strength and market expectations after the FOMC rate cut. Bitcoin’s future movement may depend on the next policy signal from the Fed.

The FOMC initiated the 2025 easing cycle in September, which contributed to Bitcoin surging past $125,000. Since then, expectations for rate cuts have remained stable across risk assets. Still, the FOMC’s internal divide on upcoming decisions complicates market predictions for December. Chair Powell stopped short of confirming further moves, reinforcing policy caution.

Over 56% of traders expect another FOMC rate cut to 3.5%–3.75% in December, according to CME FedWatch Tool. This consensus suggests investor positioning is already aligned with near-term policy projections.

Major banks, such as Citigroup and Goldman Sachs, continue to forecast two additional FOMC rate cuts in 2025. These institutions expect further easing to support borrowing and capital flows across markets. However, some uncertainty remains due to renewed US-China trade tensions influencing investor behavior. Such concerns may limit the impact of future FOMC rate cuts on risk asset prices.

The post FOMC Delivers Rate Cut, But Markets Signal Trouble Ahead appeared first on Blockonomi.