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FOMC: new 25 basis point cut to interest rates!
By Davide Grammatica
The Federal Reserve has decided to continue, as expected, with its policy of interest rate cuts: new cut of 25 basis points
The FOMC will December
The FOMC, the executive arm of U.S. monetary policy, has announced a new interest rate cut of 25 basis points. The decision meets analysts’ expectations, after U.S. inflation data have not been particularly jolting in recent weeks.
Wall Street and world financial markets already seemed sure for several days of the outcome, which consists of the third cut in 2024, bringing rates to 4.25 percent. Because of this, financial markets performed reasonably well during the day (apart from the Dow Jones, which closed its ninth consecutive session down yesterday).
Thus, the policy reversal of the 2022-2023 biennium rate hike trend, initiated in an attempt to curb inflation, continues. The turnaround had been explicitly announced by Jerome Powell, Fed chairman, last September, with an initial cut of 50 basis points. And for 2025, the FOMC appears to expect further cuts of 50 basis points.
No danger for bitcoin
The same policy, in some ways (and more consistently), has also been adopted by Christine Lagarde‘s ECB, which, however, has always expressed a more cautious attitude.
The U.S. economy, meanwhile, continues to express strong resilience. For this reason, with stable inflation that does not seem to be fast approaching the 2 percent target, attention should always be paid to the Fed’s moves.
Bitcoin, in any case, does not seem to be suffering at all from the strains derived from these macroeconomic factors. Or, at least, its bullish trend does not seem to depend in the majority on Powell’s decisions. The main reason is that the market has likely already “discounted” the Fed’s decisions, i.e., cuts that certainly do not hurt BTC’s bullish trend. However, the “macro” front may offer essential elements “weighing” BTC’s longer-term outlook.
