Fed Slashes Rates Again: Markets and Crypto Surge Amid Uncertainty

The Federal Reserve cut rates by 25 basis points for the third time this year, amid internal disagreements and economic uncertainty. Markets and cryptocurrencies responded positively, while future policy remains cautious.

The Federal Reserve has implemented its third interest rate cut of the year, reducing rates by 25 basis points to a range of 3.5%–3.75%. The decision was marked by internal disagreements, with some committee members opposing the cut or advocating for a larger reduction. The move comes amid economic uncertainty, partly due to a recent government shutdown that limited available data. The Fed signaled a cautious approach to future policy, indicating that further cuts will depend on economic indicators. Projections suggest rates may stabilize around 3.1% by 2028, with the possibility of another cut in 2026. The rate cut positively impacted financial markets, with major stock indices reaching new highs and cryptocurrencies like Bitcoin surging above $95,000. The Fed also announced plans to purchase $40 billion in Treasury bills monthly to rebuild bank reserves, clarifying this is not quantitative easing. Inflation remains above the 2% target, attributed to tariffs, and the labor market shows signs of weakening. The decision has sparked political debate and raised concerns about the central bank's independence.