Federal Reserve lowers interest rates by a quarter-point, leaving the price of Bitcoin unaffected for the time being.
The Federal Reserve (Fed) has made a 0.25% interest rate cut, marking the first reduction since the pandemic-induced economic downturn in 2020. However, the move, while expected, was underwhelming in immediate market terms, as markets had already priced in the rate cut weeks prior to the meeting.
The decision comes amidst a backdrop of slow growth signals and a sense of economic slowdown. The Labor Department has revised job creation figures for the past year, reporting 911,000 fewer jobs than previously stated. Despite this, the Fed's dual mandate of maintaining stable prices and maximum employment remains a priority.
The rate cut was not a unanimous decision among the Fed governors. While Michelle Bowman and Christopher Waller, previously opposed to cuts, agreed that a quarter-point cut was "enough for now," Stephen Miran, a newly installed governor at the Fed, dissented and called for a 0.50% cut. Trump, who has been attempting to install dovish loyalists at the Fed, including Stephen Miran, may find himself disappointed with the narrow decision.
The federal appeals court, meanwhile, blocked Trump's attempt to oust Governor Lisa Cook. The Fed conceded that uncertainty about the economic outlook remains high.
The rate cut has had varying effects on the financial markets. Gold, traditionally seen as a safe haven, surged to a record high of $3,730 this week, with investors hedging against inflation and Trump-era chaos. Gold has increased more than 10% in a month. However, Bitcoin, often referred to as digital gold, did not show signs of behaving like its traditional counterpart after the rate cut, trading just north of $116,000, with a 0.2% change over the previous hours. Ethereum remained around $4,501, with no significant change.
Looking ahead, the real drama lies in whether Powell signals further easing, whether Trump continues to meddle, and whether investors decide Bitcoin deserves to trade more like gold in this uncertain environment. Predictive market Polymarket anticipates two more rate cuts this year. The Fed governors predict two more interest rate cuts before the end of the year, with the median of the Fed members expecting these two cuts in 2025. The expectation was narrowly decided, with nine members expecting none or one cut and nine expecting two cuts, while the deciding vote came from Stephen Miran, who alone advocated for three cuts in 2025.
The future remains uncertain, but one thing is clear: the Fed is navigating choppy waters in an effort to maintain economic stability.
Read also:
- EPA Administrator Zeldin travels to Iowa, reveals fresh EPA DEF guidelines, attends State Fair, commemorates One Big Beautiful Bill
- Musk announces intention to sue Apple for overlooking X and Grok in the top app listings
- Cybertruck's Disappointing Setback, Musk's New Policy, Mega-Pack Triumphs, Model Y's Anticipated Upgrade Prior to Refresh (Week of January 25 for Tesla)
- Innovative Company ILiAD Technologies Introduces ILiAD+: Boosting Direct Lithium Extraction Technology's Efficiency Substantially
