Federal Reserve Decision and Market Impact
Mitsubishi UFJ Financial Group reports that the Federal Reserve, with a 9-3 vote, has decided to cut interest rates by 25 basis points. This decision is attributed to cooling labor markets and ongoing inflation risks. The Federal Reserve's cautious rate cut is expected to impact global markets, suggesting that restrained monetary policy could influence future economic growth and investment strategies, consequently affecting risk assets, including cryptocurrencies.
The Federal Open Market Committee decided to lower the target federal funds rate by 25 basis points to 3.50–3.75%. Key figures, including Jerome H. Powell and John C. Williams, supported this move. The decision highlights growing concerns over labor market cooling and inflation persistence.
Markets reacted with caution, as the Federal Reserve emphasized observing economic conditions carefully. Despite the cut, hawkish signals for 2026 disappointed some market participants who expected a more dovish approach. The Federal Reserve's future policy direction is surrounded by uncertainty, with expected leadership changes.
"The Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 3‑1/2 to 3‑3/4 percent." — Jerome H. Powell, Chair, Federal Reserve Board
Market players and crypto enthusiasts expressed mixed reactions to the Federal Reserve's hawkish stance. The recent meeting's decision emphasized data reliance, leaving bitcoin and other cryptocurrencies vulnerable to macroeconomic sentiment shifts and overall liquidity conditions. Analysts are closely watching Powell's signals to predict future movements.
Bitcoin Prices and Crypto Market Analysis Following Fed's Decision
In 2019, a similar Federal Reserve easing cycle occurred with internal dissent, reflecting the current divided FOMC. This past cycle also impacted macro risk assets, including cryptocurrencies.
Bitcoin (BTC) has seen notable price changes recently. As of December 11, 2025, BTC traded at $89,766.29, with a market cap of $1.79 trillion. The past 24 hours recorded a 2.87% decline, while trading volumes surged to $69.33 billion, as reported by CoinMarketCap.
The Federal Reserve's decisions continue to sway market directions through economic sentiment and liquidity conditions. Predictions are tentative, with effects likely to ripple through financial and technological sectors amid uncertain regulatory landscapes.