On December 18, 2025, the Federal Open Market Committee (FOMC) lowered the federal funds rate by 25 basis points to a target range of 3.50–3.75%, marking the third reduction of the year, per AICryptocore.com. The decision aims to support economic growth as job growth slows and unemployment rises, while inflation remains above the 2% target. Fed Chair Jerome Powell described the current rate as within a “broad range of estimates of neutral,” adding that the committee is “well positioned to wait and see how the economy evolves,” per the official press release.
For the first time since 2019, three FOMC members dissented, underscoring profound disagreement over the pace of easing. Some policymakers argue inflation is still too sticky to justify further cuts, while others warn that delaying action risks tipping the economy into recession. This split has left markets uncertain, with risk assets showing muted reactions so far.
Lower rates reduce borrowing costs for consumers and businesses, encouraging investment and spending. Historically, rate cuts have supported risk assets by improving liquidity and lowering the cost of capital. While no immediate surge occurred in cryptocurrencies or equities, many analysts expect gradual upward pressure on Bitcoin (BTC) and Ethereum (ETH) as capital becomes cheaper.
Bitcoin held near $113,000 and Ethereum around $4,070 with no sharp moves post-announcement, per CoinMarketCap. The Fed’s cautious tone and dissent suggest slower future cuts, keeping markets in a “wait-and-see” mode until clearer signals emerge, per. Long-term, the easing cycle remains intact, positioning crypto for potential gains if inflation continues to moderate.
Monitor upcoming FOMC minutes, employment data, and Powell’s Jackson Hole speech for clues on the next steps. Consider dollar-cost averaging into BTC or ETH with stop-losses below $112,000 and $4,000, respectively, or hold USDC for stability. Follow @TheBlock__ on X for real-time updates. The Fed’s move reinforces the long-term bullish case for crypto, but near-term volatility is likely until policy direction becomes clearer.
