Fed Cuts Rates by 25 Basis Points, Bitcoin Hits Record High

In Brief:

The Federal Reserve reduced its benchmark rate by 25 basis points to 4.5%-4.75%, aligning with other central banks' monetary easing.

Bitcoin reached a new record high of $76,951 following Fed Chair Powell's assurance that Trump's election win won't impact near-term policy.

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Fed Cuts Rates by 25 Basis Points, Bitcoin Hits Record High

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The U.S. Federal Reserve has lowered its benchmark fed funds rate by 25 basis points to a range of 4.5%-4.75%, following similar moves by the Bank of England and Sweden's Riksbank. The decision comes amid easing labor market conditions and progress toward the Fed's 2% inflation target, though inflation remains somewhat elevated.

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Powell Assures Trump's Win Has 'No Effect' on Policy

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Fed Chair Jerome Powell, speaking for the first time since Donald Trump's decisive election victory, stated that the results have "no effect" on the Fed's near-term policymaking. This assurance calmed fears of a hawkish shift in response to potential inflationary pressures from the president-elect's proposed policies. Powell emphasized that monetary policy remains restrictive despite the rate cut, and noted that economic downside risks have diminished since September's 50 basis point cut.

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Bitcoin and Markets React Positively

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Following Powell's remarks, Bitcoin surged to a new record high of $76,951 before slightly retreating, marking a 1.6% increase over the past 24 hours. The CoinDesk 20 Index outperformed with a 4.5% gain, while U.S. stock indexes also saw gains, with the S&P 500 and Nasdaq rising 0.8% and 1.5%, respectively. Expectations for a Fed rate pause in December decreased to 28% from 33% before the meeting, according to the CME FedWatch Tool.

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