What Jerome Powell Fed’s New Benchmark Rate Means for Crypto Market
Fed Implements Third Interest Rate Cut of 2024
The United States Federal Reserve, led by Chair Jerome Powell, has announced its third interest rate cut of the year, reducing the benchmark rate by 25 basis points (bps) to a range of 4.25%–4.5%. Powell emphasized the Fed’s commitment to maintaining economic stability, signaling that future rate adjustments will be data-driven. This latest Fed interest rate cut update reflects ongoing efforts to address economic challenges.
The move comes amidst signs of economic health, with Powell noting that risks to achieving employment and inflation goals appear balanced. This Fed rate cut decision follows a 50 bps cut in September and a 25 bps cut in November, as the Fed navigates inflationary pressures and labor market challenges.
Rate Cuts in 2025: What Lies Ahead?
Jerome Powell highlighted during his speech on the latest Fed rate cut that while the Fed’s economic policy is currently less restrictive, there’s no set timeline for future cuts. The Federal Open Market Committee (FOMC) will base decisions on evolving data and risk assessments.
“We are confident in the economy’s overall expansion,” Powell stated, pointing to inflation nearing the 2% target. However, he hinted that the pace of cuts might slow in the coming year, stressing that economic data will dictate the Fed’s next moves. This reflects his broader vision outlined in Jerome Powell’s speech.
Fed Rate Cut Impact on Bitcoin Takes a Hit Amid Crypto Uncertainty
The crypto market reacted sharply to Powell’s speech on the Fed rate cut. At the time of writing, Bitcoin (BTC) dropped nearly 3.50% in 24 hours to $100,933.64. Altcoins faced even steeper declines: Ethereum (ETH) fell 4.77%, XRP fell 7.65%, and Solana (SOL) lost 4.21%.
Traders were rattled by the ambiguity surrounding future rate cuts, which exacerbated market volatility. Despite early gains, Powell’s comments on a potential Bitcoin reserve strategy also added fuel to the fire.
Bitcoin Reserve: A Polarizing Debate
Addressing the idea of a Jerome Powell Bitcoin strategic reserve, Powell stated that the Federal Reserve lacks the authority to hold such an asset. His remarks dampened enthusiasm for the proposal, which remains a topic of intense speculation. The Fed rate cut impact on Bitcoin continues to be a closely watched development.
While the Trump administration has yet to outline a comprehensive strategy, efforts to explore the feasibility of a Bitcoin reserve are reportedly underway. Whether this plan gains traction remains to be seen, but Powell’s comments, highlighted in the federal reserve meeting, underscore the challenges of integrating crypto into the US financial system.
The Road Ahead for Crypto and the Economy
As the Fed recalibrates its monetary policy, both traditional and crypto markets are bracing for continued volatility. The next moves by the FOMC—and the unfolding Powell news on the Bitcoin reserve debate—will be closely watched by investors and policymakers alike.
For now, the focus remains on balancing inflation, employment goals, and economic stability in an evolving landscape, as the Fed news continues to shape economic policy and market reactions.
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