The Federal Reserve Open Market Committee (FOMC) announced a 25 basis point interest rate cut on Wednesday, bringing the target Federal Funds rate down to 3.75%-4%.
Wednesday’s rate cut was “fully priced in” by investors, who widely anticipated the decision, according to Matt Mena, a market analyst at investment company 21Shares. Mena also forecast:
“November has historically been one of Bitcoin’s best-performing months, with positive returns in 8 of the past 12 years, averaging 46.02% returns. Overall, we remain moderately risk-on and see a credible path for Bitcoin to break its all-time high before year-end.”
Asset prices remained flat or fell by modest amounts on Wednesday following the FOMC decision, with the price of Bitcoin (BTC) falling by about 2.4% at the time of writing, following Federal Reserve Chair Jerome Powell’s comments signaling that FOMC members are divided on a December rate cut.
“The unexpected hawkish dissent from a regional Fed president highlights that future moves are becoming more contentious,” Michael Pearce, deputy chief US economist at advisory company Oxford Economics, said in comments shared with Cointelegraph.
The growing dissent among the FOMC signals a deeply divided Fed, which could put a damper on crypto prices by starving the market of liquidity that could flow into digital and other risk-on assets.
Related: US Bitcoin and Ether ETFs rebound as Powell signals rate cuts
Market participants gauge the likelihood of additional rate cuts in 2025
The Federal Reserve began the 2025 rate-cutting cycle in September with an initial 25 basis-point cut, which helped spur BTC prices to all-time highs of over $125,000.
Over 56% of market participants expect the Fed to lower interest rates to a target window of 3.5%-3.75% in December, according to data from the Chicago Mercantile Exchange (CME).
In September, several commercial banking giants, including Bank of America, Citigroup and investment bank Goldman Sachs forecast at least two rate cuts in 2025.
The cuts would normally boost asset prices. However, the widely anticipated cuts may be overshadowed by the looming uncertainty sparked by trade tensions between China and the US, creating investor hesitation.
Magazine: Crypto traders ‘fool themselves’ with price predictions: Peter Brandt