By: [Santander27]

Last Wednesday, the Federal Reserve (Fed) made a crucial decision that shook the markets. While they met what many expected, the "fine print" and internal divisions paint a complicated picture for 2026.

If you have Bitcoin, Ethereum or are trading futures, you need to understand what just happened and why this meeting was different from the previous ones. Here I explain it to you without boring technicalities.

1. What Exactly Happened? (The Executive Summary)

The Fed decided to lower the interest rate by 0.25% (a quarter of a point).

  • New Range: Rates are now between 3.5% and 3.75%.

  • The Milestone: It is the lowest level in more than three years and the third consecutive cut this year.

The reason? They are trying to save the labor market (employment), which shows signs of weakness, slow growth, and higher unemployment in certain sectors.

⚠️ The Unexpected Turn: "Pause in sight"

Although lowering rates is usually music to investors' ears, Fed Chair Jerome Powell threw a bucket of cold water:

"It will be harder to justify additional cuts... We are in a good position to wait and see how the economy evolves."

In summary: This could be the last cut for a long time. Projections indicate that for next year they only foresee one more cut.

2. The Internal Drama: Why is there Division?

This was not a happy and unanimous decision. In fact, it was the meeting with the most disagreements since 2019. There were 3 votes against (dissent), which is very rare in the Fed:

  1. The "Aggressive" Camp (Miran): Wanted to lower more (0.50%) because they see real danger in unemployment.

  2. The "Conservative" Camp (Schmid and Goolsbee): Wanted to NOT lower anything, keep rates steady.

  3. The Trump Factor: The Fed is worried because inflation remains above 2% and it is expected that the new tariffs from President Trump will raise prices next year.

Pedagogical translation: Imagine a car (the economy). Some want to floor the accelerator, others want to brake, and Powell is trying to keep the steering wheel straight while they argue. This creates uncertainty.

3. Direct Impact on your Crypto Portfolio

Here is where we connect news with your money on Binance. How does this "pause drop" affect the market?

A. The End of "Easy Liquidity" (Impact on Bitcoin)

Bitcoin loves liquidity. When the Fed lowers rates, money is cheap and flows into risk assets (BTC).

  • The Problem: By saying they will "wait and see," Powell is telling the market that the tap of cheap money will not open much more.

  • Reaction: Bitcoin could lose that immediate explosive momentum it usually has with cuts, entering a consolidation or lateralization phase.

B. Volatility from Uncertainty

The market hates that the heads (the Fed) cannot agree.

  • The internal division (3 votes against) tells investors that no one is sure what will happen.

  • Consequence: Prepare for sharp moves and "spikes" in both directions in the coming weeks. It is dangerous territory for high leverage.

C. Inflation vs. Tariffs

If Trump's tariffs raise inflation and the Fed stops lowering rates (or raises them again), we enter a negative scenario for Crypto.

  • Smart money could return to the Dollar (USDT/USDC) or Bonds, exiting Altcoins.

4. Strategy: What to do now?

Based on this "Pause and Evaluation" scenario:

  1. Beware of the eternal "Long": Do not assume that just because rates were lowered, everything will rise without stopping ("To the moon"). Powell's warning limits optimism.

  2. Watch the DXY (Dollar): If the dollar strengthens because there will be no more cuts soon, BTC could correct.

  3. Be alert to Inflation data: Now more than ever, each monthly inflation report (CPI) will move the market. If inflation rises, the Fed will halt abruptly and cryptos could fall.

Conclusion

The Fed has thrown a lifeline to employment with this cut, but has made it clear that it will not give away anything else for now. The crypto market enters "observation" mode. It is not the time to bet blindly, but to manage risk.

Do you think the Fed is making a mistake by pausing cuts or is it prudent given the upcoming inflation? Let me know your opinion in the comments!