The U.S. Federal Reserve cut the benchmark federal funds rate by 50 basis points to 4.75% -5%, the first rate cut in four years after the central bank's most aggressive interest rate hike cycle.

Fed members expect median benchmark rates to fall to 4.4% by year-end, reflecting about 50 more basis points of cuts at the next two Federal Open Market Committee (FOMC) meetings, according to the Fed's quarterly economic forecast. This is higher than just ONE more cut projected in June.

Within minutes of the FOMC decision, the price of Bitcoin (BTC) jumped 1.2% to $61,000 before resetting gains. The largest Cryptocurrency fell 0.5% in the last 24 hours. U.S. stocks also jumped higher, with the tech-heavy Nasdaq up 0.8% and the S&P 500 rising 0.6%. Gold mostly stayed below $2,600.

Markets were widely expecting a looser monetary policy from September, as Chairman Jerome Powell said at a symposium in Jackson Hole last month that “it is time for a policy adjustment” in light of lower inflation and rising unemployment. However, traders were divided on whether the Fed would cut rates by 25 basis points or opt for a larger 50 basis point cut. Before Wednesday's decision, the market was pricing in a 40% chance of a smaller cut and a 60% chance of a larger cut, the CME FedWatch Tool showed .

The uncertainty set the stage for a volatile session. Crypto Maker Wintermute predicted Bitcoin price swings of 2%-3% in either direction after today's decision.

Arthur Hayes, co-founder of BitMEX and IT director at Maelstrom, said in an interview with CoinDesk that a Fed rate cut could crash the Markets due to the narrowing borrowing rate differential between the US dollar and the Japanese yen. This would cause investors to unwind their yen-based trades en masse. Notably, the same dynamic triggered the collapse of stocks and digital assets on August 5 , which briefly pushed BTC below $50,000.

Further clues as to policymakers' thinking will come soon when Chairman Powell holds his post-meeting press conference