Federal Reserve Cuts Interest Rate by 25 Basis Points to 4.5%–4.75%
The US Federal Reserve reduced its interest rate by 25 basis points, bringing it to a range of 4.5% to 4.75%. This decision aims to support economic growth amid ongoing inflation concerns and aligns with actions taken by other global central banks, including the Bank of England and Sweden’s Riksbank, which also announced rate cuts on the same day.
Federal Reserve Signals Confidence Despite Inflation Concerns
The Fed's statement noted that inflation might be easing toward the target level of 2%. It stated:
“Since earlier in the year, labor market conditions have generally eased, and the unemployment rate has moved up but remains low.”
Despite progress toward this goal, inflation remains above target, prompting continued caution from policymakers.
Federal Reserve Chair Jerome Powell addressed concerns regarding President Trump’s economic plans, which include tax cuts and deregulation. Powell asserted that election results would not impact the Fed's short-term policy decisions.
Bitcoin and Stocks Surge
The Fed’s announcement spurred a rally in financial markets. Bitcoin
BTC
$81,325
24h volatility:
5.9%
Market cap:
$1.61 T
Vol. 24h:
$97.24 B
reached a record price of $76,951 before a slight retreat, with the CoinDesk 20 Index climbing by 4.5% for the day.
US stock indexes also reacted positively, with the S&P 500 rising by 0.8% and the Nasdaq gaining 1.5%, reaching session highs. Investors interpreted the rate cut as a sign of the Fed’s growing confidence in the economy's resilience despite inflation concerns. The CME FedWatch Tool indicated a reduced expectation for rate stability at the next December meeting, now showing only a 28% chance of holding rates steady, down from 33% prior to the announcement.