The U.S. Federal Reserve has implemented its third rate cut this year, reducing it by 25 basis points to a range of 4.25%-4.50%.
New Interest Rate Reduction
The U.S. Federal Reserve has lowered its benchmark interest rate by 25 basis points for the third time this year, bringing the rate range to 4.25%-4.50%.
Economic Projections and Inflation
Recent economic data showed robust growth and rising inflation, focusing attention on the Fed's policy statement and Chairman Jerome Powell's press conference for insights on future monetary policy. The Fed's updated economic projections suggest a rate decrease to 3.9% by the end of 2025, marking a shift towards a less dovish stance. Inflation projections for Personal Consumption Expenditures (PCE) and core PCE have increased to 2.5% for next year.
Cryptocurrency Reaction and Expert Commentary
Following the Fed's announcement, the price of Bitcoin fell from $104,000 to around $101,000. Other cryptocurrencies like XRP, ADA, and LTC experienced nearly 10% declines. Expert Andre Dragosch noted that despite rate cuts, financial conditions have tightened due to rising long bond yields and mortgage rates. The strengthening dollar presents additional risks for Bitcoin; however, a decline in exchange balances suggests a tightening supply.
The U.S. Federal Reserve continues to adjust its monetary policy in response to changing economic conditions. Future decisions will hinge on ongoing inflation trends and expectations.
