US Cuts Interest Rate and Bitcoin Reacts With Volatility

US Cuts Interest Rate and Bitcoin Reacts With Volatility


The U.S. Federal Reserve (FED) cut the dollar interest rate by a quarter of a percentage point, bringing it to 4% from 4.25%, after five consecutive meetings without any changes to its monetary policy.

This adjustment, announced after the expected FED meeting, marks the first cut since December 2024, when the rate was reduced by one percentage point in three meetings.

For its part, the price of Bitcoin (BTC) reacted with volatility after the announcement, going from the USD 116,000 area to USD 114,900 in minutes, although it later stabilized at USD 115,000.

Just minutes after the announcement, Fed Chairman Jerome Powell delivered a speech in which he stated that the "interest rate cut is a step toward a more neutral monetary policy,".

Three weeks ago, at the Jackson Hole convention, Powell didn't directly mention a rate cut, but his remarks about possible monetary policy easing were interpreted as a clear signal. Today's decision confirms those expectations.

In its statement, the Fed noted that it will closely monitor incoming economic data and their implications for the economic outlook, remaining ready to adjust its monetary policy if risks emerge that threaten its objectives.

In addition, the agency indicated that it anticipates two more rate cuts this year, with meetings scheduled for October and December. The decision comes amid intense pressure from the administration of U.S. President Donald Trump, who has openly criticized Fed Chairman Jerome Powell for not cutting rates more quickly and has pushed efforts to replace a Fed official appointed during former President Joe Biden's administration.

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Blockchain Development
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