Federal Reserve Implements 0.25% Rate Cut
Key Points: The Federal Reserve cuts rates by 0.25% amid economic concerns. Rate range now set at 4% to 4.25%. Cryptocurrency markets react with increased volatility. The Federal Reserve lowered its target federal funds rate by 25 basis points to 4-4.25% on September 17, 2025, responding to economic uncertainty and persistent inflation. This decision impacts both crypto and financial markets, potentially boosting BTC, ETH, and DeFi assets as risk appetite increases. The Federal Reserve on September 17 reduced its target federal funds rate by 25 basis points to address economic uncertainty. The new rate range is 4% to 4.25%, reflecting ongoing worries about inflation and slower job gains. The Monetary Policy Update Announced by the Federal Reserve provides detailed insights into this decision. The FOMC, led by Chair Jerome Powell, unanimously voted except for Stephen Miran who sought a larger cut. This marked the first reduction of 2025, aimed at stabilizing economic risks. “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,” said Powell. More insights can be found in the Federal Reserve Monetary Policy Document for September 2025. Market reactions were immediate, with increased volatility in cryptocurrency trading. BTC and ETH prices reflected the changing liquidity landscape prompted by this move. The decision impacts financial and crypto markets, with potential downward US bond yields. This could increase risk appetites for digital assets like BTC. Historically, rate cuts correlate with stronger crypto rallies. The December 2024 reduction saw a rise in BTC’s price by +8% within two weeks, a pattern closely watched by market analysts. Continued quantitative tightening by reducing Treasury and mortgage-backed securities holdings remains a focus. This dual strategy amid policy shifts indicates cautious management of inflationary pressures. For a visual summary of the FOMC’s projections, see the FOMC Projections Table September 2025 Release.
