On December 10, the Fed lowered the benchmark rate by 0.25 percentage points and set a range of 3.5–3.75%. The decision met expectations, although the accompanying comments turned out to be tougher than market participants had anticipated.
Against this backdrop, cryptocurrencies fell into the red as investors did not see signs of a sustainable continuation of easing. The BeInCrypto editorial team compiled the key points regarding the Fed's decision, the statement of the head of the regulator, and the reactions of participants in the crypto community.
Main points on the Fed's decision
The rate was lowered amid significant disagreements within the Federal Open Market Committee. Three voting members opposed, marking one of the strongest divergences in recent years. Some felt the cut was insufficient, while others insisted on a pause. This situation highlighted the lack of a unified position on the future trajectory of policy.
Long-term forecasts have hardly changed. The Fed still expects one cut in 2026 and 2027, after which the rate should approach a neutral level of around 3%. For the market, such a signal seemed cautious.
The regulator announced the resumption of purchases of short-term Treasury bills. Beginning December 12, it plans to buy about $40 billion over the month to ease tensions in the money market. Formally, this program is technical in nature, although some analysts view it as an additional element of support.
Fed Chair Jerome Powell noted the resilience of the economy, pointed out weaknesses in the labor market, and reminded of the revision of overstated employment data. He emphasized that rate decisions would be made from meeting to meeting.
Analysts at The Kobeissi Letter believe that the combination of three rate cuts in a year and the launch of bond purchases reflects a slow but noticeable easing of conditions, although no explicit promises of further cuts were made.
Reaction of the crypto market
$BTC reacted with a drop to $89,459. Later, the price rose to $90,327, but the market maintained a cautious tone. The decline also affected other major coins: Ethereum, BNB, Solana, XRP, and other top-10 representatives also decreased in value.
Members of the crypto community reacted calmly to such dynamics. Many had noted in advance that the mere fact of a rate cut does not guarantee growth. Disappointed expectations led to the emergence of memes about how the idea of a quick rise was once again replaced by a pullback.
"Newbies: The Fed cut the rate! Why is crypto falling?! Experienced crypto enthusiasts: What, is this your first time, huh?".
Some analysts pointed out that a rate cut often indicates a cooling economy. From their perspective, the Fed eases conditions when signs of a slowdown appear, prompting investors to act cautiously.
Other experts consider the meeting to be one of the most dovish in recent years. The third rate cut in a row, the focus on a weak labor market, and the resumption of bond purchases create conditions for a gradual increase in liquidity. Such a backdrop traditionally supports riskier assets, including cryptocurrencies.
