The Federal Reserve announced this morning a rate cut of 0.25%, but hinted that it would slow the pace of rate cuts next year, only cutting by 0.50% instead of the 0.75% expected in September. Due to the rate cut pace not meeting market expectations, major U.S. stock indices closed sharply lower today, with the Dow Jones dropping over 1100 points, marking its tenth consecutive day of declines. The cryptocurrency market also experienced a plunge, with Bitcoin falling below the $100,000 mark. (Background: Bitcoin plunges to $100,000, Ethereum falls below $3650, Powell: The Fed is not allowed to hold Bitcoin) (Background Supplement: Bitcoin drops below $104,000) Tonight, the probability of a rate cut by the Fed is over 95%, but will it be paused next year?) The Federal Reserve announced a rate cut of 0.25% this morning, as expected by the market. The Federal Open Market Committee (FOMC) voted 11 in favor and 1 against to lower the federal funds rate to a range of 4.25%-4.5%. Cleveland Federal Reserve Bank President Beth Hammack cast the dissenting vote, advocating to maintain the rate. The Fed's hawkish stance led to a double whammy for stocks and cryptocurrencies. However, the Fed lowered its forecast for the number of rate cuts next year, indicating that future cuts will be more cautious. The new dot plot shows that, based on the median forecast, Fed officials expect the benchmark rate to reach a range of 3.75% to 4% by the end of 2025, which means there will only be two rate cuts of 0.25% each next year, less than the four expected in the September meeting. Additionally, Fed officials also lowered the forecast for the number of rate cuts in 2026, predicting that the federal funds rate will remain at 3.4%, higher than the 2.9% expected in September. The Fed's dot plot. Source: Bloomberg The Fed now expects that it will take longer for inflation to return to the 2% target, thus lowering expectations for rate cuts next year. Fed Chair Powell stated at the post-meeting press conference that today's decision was indeed difficult, but the Fed believes it is the right choice. A new phase is beginning, and they will be more cautious about further rate cuts, needing to see more progress on inflation before considering additional cuts. As the pace of rate cuts did not meet market expectations, the U.S. stock market plummeted on Wednesday, with the Dow Jones Industrial Average dropping over 1100 points, marking the first time since 1974 that it has declined for ten consecutive trading days. The performance of the four major U.S. indices is as follows: The Dow Jones Industrial Average fell 1123.03 points or 2.58%, closing at 42326.87 points. The S&P 500 index fell 178.45 points or 2.95%, closing at 5872.16 points. The Nasdaq index fell 716.36 points or 3.56%, closing at 19392.70 points. The Philadelphia Semiconductor Index fell 198.81 points or 3.85%, closing at 4970.98 points. The seven major U.S. stocks also fell, with Tesla plunging 8.28%, the worst hit, while Nvidia dropped 1.14%, showing the least decline. The cryptocurrency market also saw a plunge, with Bitcoin dropping from a morning high of $104,800 down to below $100,000 at around 10 AM, hitting a low of $98,960, currently reported at $99,632, with a 24-hour decline of 5.5%. Powell's statement: The Fed is not allowed to hold Bitcoin. Additionally, the plunge in Bitcoin may also be related to Powell's remarks about the Fed's lack of intention to participate in the government's accumulation of large amounts of Bitcoin. During the press conference this morning, he stated that the Fed is not allowed to hold Bitcoin, and regarding the legal issues of holding Bitcoin, this is something Congress needs to consider. However, the Fed is not currently seeking to change the law. Incoming U.S. President Trump previously stated that he would establish a strategic Bitcoin reserve for the U.S., but did not mention details of this plan, only stating that the U.S. government could hold approximately 200,000 Bitcoins seized from criminals as an initial reserve. Republican Senator Cynthia Lummis has proposed a bill to establish a national Bitcoin reserve, allowing the Treasury to purchase 200,000 Bitcoins annually until accumulating 1 million. However, Barclays analysts released a report this week suggesting that funding for the strategic Bitcoin reserve may require Congressional approval and new U.S. bonds, raising doubts about the plan facing strong opposition from the Fed. Related Reports: The Federal Reserve's spokesperson: The probability of a rate cut in December reaches 97.1%! Rate cuts may be paused next year. Volatility warning: Will the U.S. CPI be a green light for the Fed's rate cut in December? The U.S. finds it difficult to establish a Bitcoin reserve! Experts: The Fed is currently losing $1 billion weekly and has no money to buy BTC "Double whammy for stocks and cryptocurrencies! The Fed is expected to cut rates only by 0.50% next year, Tesla plunges 8%, U.S. stocks tumble". This article was first published on BlockTempo (the most influential blockchain news media).

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