Federal Reserve Eyes October Rate Cut Amid Economic Shifts
- Projected October rate cut by the Federal Reserve.
- Crypto market likely to react positively.
- Potential increase in DeFi trading volumes.
The Federal Reserve announced a 25-basis-point rate cut to 4–4.25% on September 17, 2025, with a 91.9% probability of another cut in October.
A further rate reduction could increase crypto market liquidity, influencing asset flows significantly. Immediate market responses include potential trading volume spikes in major cryptocurrencies.
The Federal Reserve recently cut its interest rates by 25 basis points, moving the target range to 4–4.25%. The market is now pricing a 91.9% probability of another rate cut in October, raising interest in risk assets. According to CME FedWatch Tool, these rates shifts are closely monitored.
The decision to lower the rate was made by the US Federal Reserve Board of Governors. Jerome H. Powell and Stephen I. Miran, who advocated for a larger cut, were key participants, highlighting internal Fed policy dynamics. Powell remarked, “In support of its goals and in light of the shift in the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 4 to 4–1/4 percent.”
An expected rate cut in October could increase liquidity in global markets, often benefiting risk-oriented assets like cryptocurrencies. Historically, such decisions boost trading volumes and capital inflow into high-beta assets.
This move is anticipated to strengthen cryptocurrencies as lower interest rates typically result in risk-on behavior among investors. DeFi protocols and centralized exchanges might see increased activity and trading volumes following the anticipated policy easing.
Past Fed rate cuts have driven significant bull runs in cryptocurrencies such as BTC and ETH. Market observers expect similar financial impacts if the projected rate cut occurs, as noted in the Federal Reserve’s monetary policy updates.
Historically, reductions in US interest rates have led to rallies in major cryptocurrencies and decentralized finance tokens. The upcoming decision could significantly affect trading volumes and market sentiment based on previous patterns of investor behavior.
