Bitcoin prices fell to $109,000 on Wednesday afternoon after Federal Reserve Chairman Jerome Powell indicated that there may not be another interest rate cut in December. Since then, Bitcoin’s price has remained flat near $111,000.
The decline came shortly after the central bank cut its policy rate by 0.25 percentage points, setting a target range of 3.75-4%.
This rate cut is the Fed’s second interest rate cut since the start of 2025, following the September rate cut, and marks the end of a long period of interest rate unchanged. This policy shift is aimed at lowering borrowing costs and supporting economic activity. However, after Chairman Jerome Powell said there was no guarantee of further interest rate cuts this year, selling spread across risk assets.
Before the announcement, Bitcoin was trading around $116,000 on Monday and briefly fell below $111,000 early Tuesday. Prices briefly rebounded on the news, but fell again after Powell’s remarks. According to data from Bitcoin Magazine Pro, Bitcoin is currently trading around $111,200.
During a press conference, Jerome Powell said that a rate cut in December was not guaranteed, and Bitcoin price reacted immediately, plummeting to $109,000 on a sharp red candle, but quickly recovering. The broader crypto market reacted similarly.
Powell said inflation, excluding the impact of tariffs, was “not far” from the central bank’s 2% target, but stressed that policymakers “have not yet made a decision for December.” Powell noted that officials had “very different views” at today’s meeting.
Following his remarks, expectations in the market for further interest rate cuts within this year rapidly receded. Federal funds futures now price the probability of a December rate cut at 71%, down from about 90% earlier in the day, according to CME Data and prediction markets like Calci and Polymarket.
Two-year Treasury yields rose 9 basis points as traders reassessed the Fed’s near-term trajectory.
Historically, Bitcoin has reacted sharply to changes in monetary policy. After the Fed’s emergency rate cut in March 2020, Bitcoin fell nearly 39% before recovering. When the Fed cut interest rates in September 2025, there was limited market reaction, suggesting expectations were already priced in.
Bitcoin price as Fed signals end to quantitative tightening
Powell also said the central bank was nearing the end of its quantitative tightening program and confirmed the expectation that the Fed would end QT by December. This involves removing a portion of our U.S. Treasury securities and mortgage-backed securities holdings from our balance sheet as they mature, rather than reinvesting the principal.
QT shrinks the Fed’s balance sheet and reduces liquidity by letting Treasury securities mature without reinvesting them or selling them to the market.
The process has been underway since 2022, with nearly $1 trillion in securities being removed as part of an effort to combat inflation.
Ending QT will stop liquidity depletion. Many analysts believe this shift could ultimately support inflows into risk assets, including Bitcoin.
But Powell warned that policy remained dependent on economic data, adding further uncertainty to market expectations.
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