As widely expected by market participants, the US Federal Reserve cut its benchmark Fed funds rate by 25 basis points to 4.5%-4.75% on Thursday, following in the footsteps of other central banks to ease monetary policy.
“Labor market conditions have generally eased since the beginning of the year, and the unemployment rate has edged up but remains low,” the press release said. “Inflation has made progress toward the Committee’s 2 percent objective but remains somewhat elevated.”
In the minutes following the FOMC decision, the price of bitcoin (BTC) was hovering around $76,492, near its all-time high, up 1.5% over the past 24 hours. The broader market’s CoinDesk 20 index outperformed with a 4% gain over the same period.
More important to investors will be what Fed Chair Jerome Powell has to say about the central bank’s path forward after Donald Trump’s decisive U.S. election victory. The president-elect’s proposed policies of tax cuts, tariffs and deregulation to stimulate economic growth could rekindle inflation pressures, forcing the Fed to take a more cautious approach that could slow, pause or even reverse its rate-hike cycle.
Market participants now see a 33% chance the Fed will stand pat on rates at its upcoming December meeting, up from 14% a month ago, according to CME’s FedWatch Tool.
Market participants now see a 33% chance the Fed will stand pat on rates at its upcoming December meeting, up from 14% a month ago, according to CME’s FedWatch Tool.
