The Federal Reserve’s recent decision to adjust its key interest rate has provided a mild boost to Bitcoin, signaling a potential shift in monetary policy that could influence broader financial markets. Following its September 17th meeting, the Federal Open Market Committee (FOMC) implemented a quarter-point reduction in the benchmark rate, a move that had been anticipated by many economists and market participants. This adjustment, the first since December of the previous year, brings the target range for the federal funds rate to 4%-4.25%.
The FOMC’s decision to lower interest rates is a response to a complex economic landscape. While some indicators, such as stock market performance and GDP growth, had shown resilience, underlying concerns about consumer spending and a slowing labor market appear to have prompted this easing. The decrease in the federal funds rate can reduce borrowing costs for businesses and consumers, potentially stimulating economic activity.
Bitcoin, often viewed as a digital asset sensitive to macroeconomic shifts, experienced a modest upward price movement following the rate cut announcement. It briefly touched $117,900 before consolidating. This reaction aligns with expert opinions suggesting that while short-term volatility may persist, a more accommodative monetary stance could be a positive factor for cryptocurrencies in the longer term. The next FOMC meeting, scheduled for October 28-29, is expected to provide further clarity on the Fed’s policy trajectory, with market consensus leaning towards continued gradual easing.
Federal Reserve Chair Jerome Powell, in his post-meeting press conference, elaborated on the economic conditions underpinning the decision. He highlighted that while inflation has seen an uptick, so too has the unemployment rate. Powell noted that U.S. GDP growth in the first half of the year was approximately 1.5%, a deceleration from the previous year, largely attributed to reduced consumer spending. Additionally, he pointed to ongoing weakness in the housing sector and a slowdown in job creation, with new jobs averaging 29,000 per month in August, pushing the unemployment rate to 4.3%. Despite these concerns, wage growth continues to outpace inflation, albeit at a moderate pace.
Powell also addressed inflationary pressures, noting an acceleration in goods inflation contributing to the overall rise. Short-term inflation expectations have increased, partly due to tariff policies, but long-term expectations remain anchored around the Fed’s 2% target. Importantly, Powell indicated a lack of broad support among FOMC members for a more aggressive 50-basis-point rate cut, deeming such a significant policy overhaul unnecessary at this juncture. The Fed’s current assessment prioritizes managing the risks associated with a potentially weakening labor market over those posed by elevated inflation.
In response to press inquiries, Powell declined to comment on a legal matter involving Lisa Cook, a member of the FOMC. Cook, appointed during President Joe Biden’s administration, faced dismissal from her position by President Donald Trump in late August 2025, with accusations of mortgage-related fraud. Cook has initiated legal proceedings, asserting a lack of valid grounds for her removal. This situation has been interpreted by some in the American press as a potential attempt by the Trump administration to exert influence over the Federal Reserve, a concern that also arose with the appointment of President Trump’s supporter, Steven Miran, to the FOMC.
Chris brings over six years of hands-on experience in cryptocurrency, bitcoin, business, and finance journalism. He’s known for clear, accurate reporting and insightful analysis that helps readers stay informed in fast-moving markets. When he’s off the clock, Chris enjoys researching emerging blockchain projects and mentoring new writers.