Key Developments and Federal Reserve's Stance
On December 10, 2025, the Federal Reserve lowered the federal funds rate by 25 basis points during the FOMC meeting, reflecting internal disagreements on future monetary policy direction.
The Federal Reserve's recent decision to lower interest rates marks a significant move amid an observed cooling in the labor market. With a vote split of 9 to 3, the central bank aims to address persistent economic risks. Jerome Powell emphasized the gradual cooldown in job growth and the nuanced inflationary landscape, stating, "Job gains have slowed this year, and the unemployment rate has edged up through September. More recent indicators are consistent with these developments."
Implications of this decision are multifaceted, weighing on market expectations of more hawkish policy shifts. Notably, despite the rate cut, the consensus within the Federal Open Market Committee (FOMC) suggests a reluctance to hasten further reductions, signaling sustained caution.
Reactions from global markets highlight a blend of anticipation and skepticism. Prominent figures across the financial sector acknowledge the Federal Reserve’s cautious approach, which underscores the challenging economic landscape. Powell confirmed that a single rate cut is anticipated in 2026, diverging from market forecasts of multiple cuts.
Impact on Bitcoin and Cryptocurrency Markets
The Federal Reserve's rate cut impacts financial conditions, influencing risk assets, including Bitcoin and Ethereum, by affecting USD liquidity and global interest rate environments essential for crypto markets.
The Federal Reserve's rate cuts have historically led to increased volatility in the cryptocurrency markets.
Bitcoin (BTC) experienced a 2.51% decline over the last 24 hours, trading at $90,111.63 according to CoinMarketCap data. BTC's extended downturn, with a 21.96% drop over 90 days, coincides with macroeconomic developments, including shifts in U.S. monetary policy and Federal Reserve's statements.
Insights from the Coincu research team highlight that the Federal Reserve's current policy measures may limit crypto's rally potential. Historical actions of modest rate cuts have often led to increased volatility and opportunity shifts in digital asset markets.
Rate cut expectations differ; economic transparency continues to be pivotal.