Bitcoin's price ticked higher immediately after the U.S. Federal Reserve cut interest rates by 25 basis points on Wednesday.
The Federal Open Market Committee (FOMC) did what many economists and traders predicted: It cut the benchmark federal funds rate to a lower range of between 4.50% and 4.75%. This follows a 50 basis point cut in September.
"In support of its goals, the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 4.50% to 4.75%," the central bank said in a statement. "Recent indicators suggest that economic activity has continued to expand at a solid pace. Inflation has made progress toward the Committee's 2% objective but remains somewhat elevated."
Regarding the possibility of further rate cuts, the central bank said, "In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook."
"...the Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments," the FOMC statement added.
Fed Chair Jerome Powell is scheduled to hold a press conference at 2:30 p.m. ET.
The recent rate cut follows bitcoin gaining a new all-time high of over $76,000 on Wednesday, spurred by Donald Trump’s U.S. presidential victory.
However, deVere Group CEO Nigel Green expressed concerns that a Trump administration might push for greater influence over Federal Reserve policies.
"Trump frequently criticized the Fed, particularly under Jerome Powell’s chairmanship, for not lowering interest rates more aggressively. In 2018 and 2019, he repeatedly voiced dissatisfaction, claiming that higher rates were a drag on the U.S. economy and put the country at a competitive disadvantage in international markets," Green said.
He added that during Trump's previous term, from 2017 to 2021, the former president even floated the idea of negative interest rates — an unconventional stance in U.S. policy.
"With inflation cooling but still elevated, Trump may argue that lower rates are necessary to fuel economic growth, particularly in the lead-up to the 2026 midterms," Green said.
Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.
© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
