- Fed delivers third 25 bps rate cut of 2025 in a 9–3 FOMC vote split
- Dow jumps 500 points while Fed offers little clarity on the January path
- Fed rate cut pulls crypto prices lower as BTC, ETH, XRP, and SOL reverse gains
The U.S. Federal Reserve cut its key policy rate by 25 basis points on Wednesday, marking the third reduction this year. Fed Chair Jerome Powell said the Federal Open Market Committee, FOMC, lowered the target range by 0.25 percentage point to support its employment and inflation goals after weighing current risks in the economy.
Fed Delivers Third 25 Bps Cut As FOMC Vote Splits 9 To 3
Details of the decision process reveal a 9-3 vote split between members of the decision-making committee, featuring hawkish and dovish dissents. Meanwhile, Powell reiterated the committee’s commitment to achieving its dual mandate goals of maximum employment and stable prices for the benefit of the American people.
Following Powell’s assurances, particularly noting that the latest interest rate reduction puts the government in a comfortable position, U.S. stock prices surged, with the Dow Jones Industrial Average adding 500 points.
Meanwhile, the Fed Chair didn’t provide much information about what to expect in January, noting that the FOMC will react after observing the economy’s performance.
Fed Rate Cut Triggers Selloff In Bitcoin, Ethereum, XRP, Solana
In the meantime, major cryptocurrencies, including Bitcoin, Ethereum, XRP, and Solana, crashed following the latest FOMC press statement.
Bitcoin, which showed bullish momentum earlier on Wednesday, flipped lower and dropped nearly 3% into the close. The decline extended into Thursday morning with another 3% slide, leaving BTC near $90,057, according to TradingView data.
Ethereum reversed sharply as well. The second-largest crypto gave back an intraday gain close to 5% following the Fed’s latest decision.
The downward slide continued on Thursday morning with an additional 4% decline, leaving the price at $3,197 at the time of filing this report. Meanwhile, XRP followed a similar pattern, losing approximately 5% of its value over the last 24 hours.
XRP followed a similar pattern. The token lost roughly 5% over the last 24 hours, sliding alongside Bitcoin and Ethereum as traders reacted to the rate cut and Powell’s comments about the economic outlook.
Volatility picked up across large caps as short-term positioning reset after the statement and press conference.
Solana’s case is similar to those of the cryptocurrencies already mentioned, highlighting an industry-wide pullback in digital asset prices.
The scalability-focused crypto reversed its movement on Wednesday after reaching a $142.62 daily high. The cryptocurrency traded for $131.06 at the time of writing, reflecting a 9% pullback following the latest interest rate cut.
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