The U.S. Federal Open Market Committee (FOMC) announced a 25 basis point rate cut on Wednesday, lowering the target range for the federal funds rate to 3.75%-4%.
Investment firm 21Shares market analyst Matt Mena stated that Wednesday's rate cut was "fully priced in" by investors, who generally anticipated this decision. Mena also predicted:
Following the FOMC's announcement on Wednesday, asset prices remained stable or slightly declined, with Bitcoin (BTC) price dropping about 2.4% at the time of writing, after comments from Federal Reserve Chairman Jerome Powell indicated a division among FOMC members regarding a rate cut in December.
Michael Pearce, Deputy Chief U.S. Economist at consulting firm Oxford Economics, commented in a discussion with Cointelegraph: "The unexpected hawkish dissent from local Fed chairs highlights that future actions are becoming more contentious."
The growing divisions within the FOMC indicate a serious split within the Federal Reserve, which could suppress cryptocurrency prices by reducing market liquidity flowing into digital assets and other risk assets.
The Federal Reserve began its rate cut cycle for 2025 in September, with the first cut of 25 basis points, which helped push BTC prices to a historic high of over $125,000.
According to data from the Chicago Mercantile Exchange (CME), over 56% of market participants expect the Federal Reserve to lower rates to a target range of 3.5%-3.75% in December.
In September, several major commercial banks, including Bank of America, Citigroup, and investment bank Goldman Sachs, predicted at least two rate cuts in 2025.
Rate cuts typically boost asset prices. However, the widely anticipated rate cuts may be overshadowed by uncertainties arising from U.S.-China trade tensions, causing investor hesitation.
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