The US Federal Reserve has reduced its benchmark fed funds rate by 25 basis points to a range of 4.25%-4.50%, marking the third consecutive easing move this year and a total of 100 basis points of rate cuts since September. Although the market had anticipated this move, recent data has shown strong economic growth and rising inflation.
Investors are now looking to the policy statement, updated economic projections, and Chairman Jerome Powell’s press conference for clues about the Fed’s future policy actions. The Fed’s quarterly economic projections, including the “dot plot” indicating the expected Fed funds rate, reveal that policymakers expect the rate to decline to 3.9% by year-end 2025, which is higher than the 3.4% projected in September, signaling a less dovish monetary policy in 2025.
Following the announcement, the price of bitcoin (BTC) traded slightly above $104,000, and the S&P 500 index fell to a session low.
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