The latest FOMC news signals a clear dovish trend among U.S. Federal Reserve officials, with newly released minutes showing that further interest rate cuts are likely before the end of the year. The majority of participants judged that “further easing of policy is appropriate for the remainder of 2025,” marking a notable shift from the cautious tone that has dominated much of this year.
Although the central bank remains officially committed to its 2% inflation target, the tone of the September meeting minutes suggests the Fed is starting to worry more about slowing employment than about prolonged inflation. The first interest rate cut in September (25 basis points) was prompted by signs of a softening labor market, with job growth slowing and the unemployment rate rising.
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FOMC News: Two more rate cuts expected in 2025
The Fed’s median forecast calls for two more 25 basis point (bps) rate cuts by the end of the year, likely at the October and December FOMC meetings. Market expectations are also broadly consistent with this view. There is now a 92.5% chance of a 25bps rate cut at the October 29th meeting, according to CME FedWatch data.
The calm tone had an immediate impact on risk assets. Bitcoin rose after the minutes were released, briefly exceeding $124,000, but settled around $123,500. The broader cryptocurrency market cap remains above $4.19 trillion.
Cryptocurrency traders often view lower interest rates as bullish, as easy monetary policies tend to increase liquidity and risk appetite in both traditional and digital asset markets. Therefore, expectations for further easing have strengthened cryptocurrency sentiment, especially after months of mixed signals from the Fed.
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Employment and inflation debate
The FOMC’s dual mandate of maximizing employment and maintaining price stability has once again become a balancing act. The minutes of the meeting revealed that members were divided over whether to prioritize addressing downside risks to employment or continue pushing up inflation.
Most participants agreed that, given recent labor data, the policy stance should move toward a more neutral level. Although they noted that inflation risks had “reduced or not increased,” several members remained cautious, arguing that easing too quickly could reignite price pressures.
Kansas City Fed President Jeffrey Schmidt reiterated that inflation remains “too high” and said he wants a more cautious pace of easing. By contrast, newly appointed Governor Stephen Milan, the only official to oppose a deep 50bps rate cut in September, said he was “optimistic about the inflation outlook” and supported a more aggressive approach to easing.
This split highlights a key uncertainty as to whether current interest rate levels remain restrictive. Some members argue that the real policy stance may no longer be significantly tighter, while others believe the economy could still benefit from additional easing to offset labor market weakness.
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Impact on Bitcoin and virtual currencies
For the crypto market, the Fed’s shift to accommodative policy reinforces the familiar narrative that Bitcoin and other decentralized assets grow as real yields fall and liquidity expands. Former hedge fund manager James Rabish said that while the Fed is “still concerned about rising inflation,” its willingness to cut interest rates highlights why “sound money like BTC is more important than ever.”
Traders quickly reacted to the FOMC news, with Bitcoin surging above $124,000 before stabilizing around $123,500. In previous cycles, easing phases have often coincided with new upswings in risk-on assets, including cryptocurrencies. But despite the rate cut, traders remain cautious following the post-FOMC swings in September, when Powell’s comments briefly sparked a sell-off.
With the next Fed meeting approaching and the ongoing government shutdown delaying the release of economic data, Powell’s upcoming speech will be the only major policy signal this week. Both Wall Street and the cryptocurrency market are bracing for potential volatility.
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Important points
FOMC news confirms the Fed’s flexible stance, with two more rate cuts expected in 2025.
The Fed’s accommodative policies have pushed the price of Bitcoin above $124,000, fueling optimism across the broader crypto market.
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