FOMC Update: Members Set to Relax Policy Further This Year – Implications for Crypto?
The recent FOMC announcements indicate a distinct dovish attitude among U.S. Federal Reserve officials, with newly published minutes revealing that further rate cuts are probable before the year’s close. A majority of participants considered it “suitable to loosen policy further throughout the rest of 2025,” representing a significant change from the careful stance that characterized much of the year.
While the central bank continues to officially uphold its 2% inflation goal, the sentiment expressed in the September meeting minutes implies that the Fed is increasingly worried about a downturn in employment rather than persistent inflation. The initial rate cut in September—by 25 basis points—was prompted by signs of a weakening labor trading market, with job gains decelerating and the unemployment rate rising slightly.
EXPLORE: 15+ Upcoming Coinbase Listings to Watch in 2025
FOMC News: Two Additional Rate Cuts Anticipated in 2025
Based on the Fed’s median projection, two more 25-basis-point (bps) reductions are anticipated before the close of the year, likely occurring at the October and December FOMC gatherings. Market predictions generally correspond with this outlook. Current CME FedWatch data reflects a 92.5% chance of a 25-bps reduction during the October 29 meeting.
The softer tone had an immediate effect on risk assets. Bitcoin surged following the publication of the minutes, temporarily exceeding $124,000 before stabilizing around $123,500. The overall crypto market capitalization of cryptocurrencies remains above $4.19 trillion.
Crypto traders typically interpret lower interest rates as optimistic, as looser monetary policy can enhance liquidity and risk tolerance across both traditional and digital asset markets. Consequently, the anticipation of additional easing has bolstered sentiment in the crypto space, particularly after months of mixed signals from the Fed.
DISCOVER: Gold Price Hits $4K ATH, Leaves Nasdaq In The Dust — Is the Bull Cycle Toast?
The Employment Versus Inflation Discussion
The FOMC’s dual mandate to maximize employment and maintain price stability has once again turned into a delicate balancing act. The minutes indicated a division among members regarding whether to prioritize mitigating risks to employment or focus on controlling inflation.
Most members concurred that the policy stance should shift towards a more neutral position in light of recent labor data. They observed that inflation risks had “either decreased or not escalated,” although several members remained cautious, contending that relaxing too swiftly could reignite inflationary pressures.
Kansas City Fed President Jeffrey Schmid reiterated that inflation is still “too high” and expressed a preference for a more gradual easing approach. Conversely, newly appointed Governor Stephen Miran, the sole official to dissent in favor of a larger 50-bps cut in September, conveyed that he is “optimistic about the inflation outlook” and advocates for a bolder easing strategy.
This divergence underscores a significant uncertainty: whether the current interest rate is still restrictive. Some members posited that the actual policy stance may no longer be substantially tight, while others suggest that the economy might still require further easing to counteract labor trading market weaknesses.
EXPLORE: 16+ New and Upcoming Binance Listings in 2025
Consequences for Bitcoin and Crypto
For crypto asset markets, the Fed’s shift towards a more lenient policy reaffirms a familiar narrative: that BTC and other decentralized assets flourish when real yields decline and available volume increases. Former hedge fund manager James Lavish remarked that while the Fed remains “still concerned about rising inflation,” its readiness to lower rates nonetheless emphasizes why “sound money like Bitcoin is increasingly important.”
Traders quickly responded to the FOMC update, with Bitcoin surpassing $124,000 before stabilizing around $123,500. Historically, easing periods have often aligned with renewed rallies in risk-sensitive assets, including crypto. However, traders proceed with caution following the market fluctuation seen after September’s post-FOMC fluctuations, when Powell’s remarks temporarily sparked a sell-off despite the rate cut.
As the next Fed meeting nears and economic data releases remain postponed due to the ongoing government shutdown, Powell’s upcoming address will be the sole significant policy indicator this week. Both Wall Street and crypto asset markets are preparing for possible price swings.
DISCOVER: 16+ New and Upcoming Binance Listings in 2025
Join The 99Bitcoins Announcement Discord Here For The Latest Trading market Updates
Key Takeaways
- FOMC announcements confirm the Fed’s gentler approach, with two more rate reductions projected for 2025.
- The Fed’s more accommodating policy propelled BTC past $124,000, enhancing optimism across the broader crypto landscape.
The post FOMC News: Members to Ease Policy More This Year – What it Means For Crypto? appeared first on 99Bitcoins.
