Fed Cuts Rates Again, Opening Door for More Crypto Investment
The U.S. Federal Reserve lowered interest rates by 25 basis points on Wednesday, setting the new federal funds target range at 4.00% to 4.25%. This marks the Fed’s fourth rate cut since September 2024 and came as no surprise to markets, with the decision passing 11–1 among voting members of the Federal Open Market Committee (FOMC).
Lower interest rates tend to weaken the appeal of traditional fixed-income investments, and analysts say this move could shift investor interest toward higher-risk assets like Bitcoin and Ethereum.
Why It Matters
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Liquidity on the Rise: As borrowing costs fall, cash becomes more available, often pushing investors toward assets with higher potential returns. With two more rate cuts expected by year-end, some see a bullish setup for crypto markets.
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Political Pressure Mounts: President Donald Trump has continued to pressure the Fed for steeper cuts since returning to office in January. On Monday, he posted that the Fed should cut rates “bigger than Powell had in mind,” and has even floated the idea of replacing Fed Chair Jerome Powell.
While the market’s initial reaction was muted, crypto analysts say the long-term implications of easier monetary policy could provide a strong tailwind for digital assets—especially if inflation remains under control.
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