Fed drops rates 25 basis points as crypto market loses more

Fed drops rates by 25 basis points as economists forecast fewer cuts in 2025 and crypto market falls amid de-risking before Trump's administration.

The Fed cut its benchmark interest rate by 25 basis points despite conflicting economic signs.

Ethereum and Solana lost more than Bitcoin, which fell 4%.
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The Federal Reserve reduced its benchmark interest rate by 25 basis points to 4.25%-4.5% amid conflicting economic data.

The rate is a full percentage point lower than in September, when authorities started lowering rates.

GDP growth is expected to reach 2.5% in 2024 and fall to 2.0% by 2027, according to the Federal Reserve.

Unemployment is forecast to grow to 4.3% in 2025, while PCE index inflation is projected at 2.4% for 2024 and 2.5% for 2025, over the Fed's 2% objective.

Crypto traders lowered risk exposure before the Fed statement, causing widespread falls.

Bitcoin fell 4% from its annual top of almost $108,000 yesterday, bringing the crypto market down 5% in 24 hours.

Ethereum fell 5% and Solana 6% from their weekly highs of $4,100 and $230, respectively.

Analysts are waiting for President-elect Donald Trump's tariff and deportation proposals to be implemented before anticipating the Federal Reserve's next actions for the year.

Many economists expect just two rate decreases in 2025.

The “Trump trade” has occurred in the crypto market since Trump's November 6 election, with Bitcoin rising over 50% and certain altcoins over 200%.

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