- Fed cuts rates to 3.75%-4.0%, citing data gaps from government shutdown.
- Powell stays cautious, halts QT, and avoids firm December guidance.
- Crypto and stocks react mildly as traders await clearer policy signals.
The U.S. Federal Reserve cut interest rates by 25 basis points on Oct. 29, bringing the target range to 3.75%-4.0%. Fed Chair Jerome Powell told reporters the committee is “driving in the fog” due to a lack of reliable economic data caused by an ongoing government shutdown. The decision passed with a 10-2 vote.
The rate reduction represents the second consecutive 25-basis-point cut from the central bank, according to Bybit’s Crypto Insights Report. The Fed implemented the cut to support a softening labor market, despite inflation remaining above its 2% target.
Powell Signals Caution on December Decision
Powell described the current rate as “modestly restrictive” but declined to commit to further easing in December. The Fed chair emphasized the committee’s need for additional economic data before making its next policy move. Internal divisions among Fed members have added to the uncertainty surrounding the December meeting.
The central bank also announced it would halt its balance sheet runoff starting Dec. 1, 2025. The decision to stop quantitative tightening reflects concerns over market liquidity conditions.
Crypto Markets Show Tepid Response
Bitcoin and Ether experienced short-term gains following the announcement of the rate cut. The rally proved more subdued than reactions seen in previous easing cycles, with volatility remaining compressed. Bybit’s report noted the muted response across major crypto assets.
Traditional markets displayed mixed reactions to the policy change. Equities rallied initially but retreated after Powell’s comments about data dependency. Treasury yields reversed early declines and moved higher through the session. The report highlighted persistent institutional caution in crypto markets, citing regulatory concerns and tepid ETF flows as factors limiting stronger price action.