Fed Trims Rates 25bps, Crypto Eyes Upside as Inflation Risks Linger

The U.S. Federal Reserve lowered its benchmark federal funds rate by a quarter percentage point to a range of 4.00%–4.25% on Wednesday, marking its first reduction in nine months. The move follows a December 2024 cut of the same size and comes as officials cite a slowing labor market and stubbornly high inflation.

“The Committee decided to lower the target range for the federal funds rate by 1/4 percentage point,” the Fed said, adding it will monitor incoming data and economic risks before considering further changes.

For everyday Americans, the cut may mean slightly cheaper borrowing costs, but it also raises concerns of renewed inflationary pressure. Risk-on markets reacted cautiously: Bitcoin held steady immediately after the announcement, while crypto traders weighed the potential for a broader rally.

Historically, lower rates have supported risk assets such as Bitcoin and Ethereum, as seen during the 2020–2021 bull run fueled by pandemic-era easing. Still, the relationship between Fed policy and crypto prices remains unpredictable.

The decision is also politically charged. President Trump has repeatedly urged the Fed to slash rates and even tried to remove a sitting governor, while the Senate just confirmed Stephen Miran, a former Trump economic advisor, to the Fed board. These developments have renewed debate over the central bank’s independence and whether Wednesday’s cut was driven more by economic fundamentals or political pressure.