fedratedecisions

Lately, every corner of crypto Twitter and Binance Square is buzzing with the same claim — that the Fed’s rate cuts will trigger a massive altcoin rally. But history suggests it’s not that simple.
When the first rate cut arrived in 2024, it sparked a sharp market rally — the kind that made everyone believe a new bull cycle had begun. Yet by September, that enthusiasm collapsed into a classic pump-and-dump pattern. It wasn’t sustainable growth, just a temporary wave of optimism.
Then came November, when Trump’s election victory injected fresh energy into the market. Ethereum (ETH) rallied hard again, but this time, it was more about politics than fundamentals. For a brief moment, it felt like momentum was back.
But December reminded us how fragile hype can be. That surge quickly turned into a prolonged eight-month correction, with ETH losing more than 60% before finding stability.
Fast forward to 2025 — momentum has improved, and prices have recovered well. ETH is still up over 60% since the first rate cut, showing real strength. Yet, technical indicators suggest a possible 15–20% correction ahead — not a crash, but a market reset that often comes after steady rallies.
Rate cuts are often misunderstood. They don’t necessarily mean liquidity is flooding the markets. More often, they signal that the economy is cooling and that money is being reshuffled, not expanded. The relief can lift risk assets temporarily, but the ride is rarely smooth.
Adding to the uncertainty are the upcoming Trump–Xi tariff deadlines. A single headline or unexpected policy shift could flip the market’s direction overnight.
So while the hype machine calls this the start of “alt season,” the charts — and history — tell a different story. Rate cuts can light the spark, but macroeconomics still control the fire.
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Traders are exiting their bets on a July Fed rate cut following the release of the June US job data. The US unemployment rate dropped below expectations, while the country also added more jobs than analysts expected.
This further strengthens the Fed’s case to wait and see the effects of the tariffs rather than rushing to cut rates.
Traders Increase Bets Against A Fed Rate Cut In July
Polymarket data shows that there is a 94% chance that the Fed will keep interest rates unchanged following the July 30 FOMC meeting. Meanwhile, CME FedWatch data shows that traders have also exited their bets for a rate cut this July.

As we reported earlier, the odds for a 25-basis-point (bps) Fed rate cut rose to around 25% amid hopes that Jerome Powell and the FOMC would bow to pressure from Donald Trump. However, the odds have sharply dropped to 4.7% following the release of the US Job data.

US Bureau of Labor data shows that the total nonfarm payroll employment increased by 147,000 in June, way above the expected 110,000. Meanwhile, the unemployment rate dropped to 4.1%, below expectations of 4,3%.
The market had been pricing in hopes of a July Fed rate cut based on these expectations since a declining labor market could motivate Powell and the FOMC to cut rates at the July 30 meeting.
Powell himself had left the door open to a July interest rate cut when he spoke at the ECB forum on Central Banking in Europe earlier this week. The Fed Chair remarked that he couldn’t say yet whether a July Fed rate cut would happen or not, and that it would depend on incoming data.
This US job data suggests that there is no need for the Fed to rush into cutting rates, as the labor market remains solid. Powell has hammered on this for a while, declaring that they are in a good position just to wait and assess the impact of the Trump tariffs.

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