Fed Rate Cut Sparks Crypto Rally Hopes
The post Fed Rate Cut Sparks Crypto Rally Hopes appeared on BitcoinEthereumNews.com.
The U.S. Federal Reserve broke ground on September 17, 2025, by cutting interest rates for the first time since December 2024, lowering the federal funds target range by 25 basis points to 4.00%–4.25%. The move came in response to mounting signals of labor market weakness, alongside inflation that remains above target but showing signs of cooling. While this cut was widely expected, markets had priced nearly a 95%+ chance of a 25bps cut in advance, may mark the start of a broader easing cycle. With the Fed projecting two additional cuts this year and possibly more in 2026, analysts believe this policy inflection could catalyze a once-in-a-generation rally across crypto markets. What drove the Fed cut, and why it matters Labor market indicators have softened: recent reports point to slowing in job creation and mounting signs of unemployment creeping up, though official numbers remain relatively stable. Inflation, measured by core Personal Consumption Expenditures (PCE), is still elevated, around 2.9% year over year—well above the Fed’s 2% target. But the combination of cooling inflation, a weakening job market, and easing global pressures has given the Federal Open Market Committee enough justification to begin trimming rates. Chair Jerome Powell described the cut as “risk management,” emphasizing that policy is now more about guarding against downside risks than pressing on with tightening. Lowering rates generally eases borrowing costs, weakens the U.S. dollar, and increases liquidity—conditions that can be highly favorable for risk assets like cryptocurrencies. When rates fall, the opportunity cost of holding non-yielding assets such as Bitcoin or meme coins declines, and interest in speculative yield and high growth tends to rise. Historically, major rate cuts have preceded substantial crypto rallies, especially when combined with dovish forward guidance. Market reaction: muted but loaded with potential Although the 25bps cut was priced in…
