and many people in the crypto world were watching for the result. The bank lowered its main rate by zero point two five percent on Wednesday. This was the third cut of the year. Many traders were ready for this move and it did not come as a shock. Right after the news the price of Bitcoin moved down by a little and the price of Ethereum moved up by a small amount. Bitcoin moved near ninety two thousand dollars and lost a bit over one percent in a day. Ethereum stayed a little strong and traded just over three thousand three hundred dollars.
The Fed did not give any promise about more cuts in the new year. The bank said that it will watch the data and the risks before it makes any new move. The bank also said that it will start buying short term Treasury bills again. The bank said that the level of reserves has gone down and now it needs to buy short term assets to keep the system stable.
The vote inside the bank was not fully agreed. Two members wanted no change in the rate. One member wanted a bigger cut. The new outlook from the bank shows that most members expect around two cuts next year. One member even sees up to six cuts ahead. This shows that the members do not fully agree on the path of the rate.
The US economy is in a tricky time. Some reports show fewer jobs and slow growth. A recent hiring report showed that employers cut thirty two thousand jobs last month. Job growth has been slow in the second half of the year and the month of November was weak for factory jobs. Inflation is still not fully calm and the job market looks soft. The bank is trying to keep a balance. If it cuts rates too fast prices may rise again. If it waits too long the job market may get worse and the weak economy may last longer. This is the tight path the bank is trying to walk.
Most traders already believed that a rate cut was coming. Before the meeting there was a strong belief in the market that the bank would cut the rate again. The cut happened and now traders think there is a low chance of another cut in January.
There is also talk about who will lead the bank next. The term of the current chair ends in May. The new president has spoken about choosing someone who is ready to cut rates fast. There is also talk that the next chair may be more open to crypto. Many traders think that a leader who supports crypto could push crypto into the banking world at a faster speed.
The rate cut news made the crypto market move in small waves but the long term path will likely depend on the next jobs data and the next inflation report.
