The Federal Reserve has cut interest rates by 25 basis points (bps), exactly in line with market expectations. This marks the third rate cut in 2025. However, this meeting revealed notable divisions among Fed officials. Member Miran pushed for a 50 bps cut (dovish), while Smed and Goolsbee preferred to keep rates unchanged (hawkish). Ultimately, the committee settled on a 25 bps reduction.
Dot Plot: According to the Fed’s median projection, interest rates could reach 3.4% in 2026, suggesting that we may see only one rate cut that year.
Fed Chair Jerome Powell stated that the labor market is showing weak performance and inflation risks are rising. Still, he expressed optimism about the overall economic outlook.
Impact on Gold and Crypto Based on Today’s Fed Meeting:
Since the dot plot indicates limited rate cuts in 2026 (a somewhat hawkish signal), gold may not see an impulsive move right away. However, the broader trend still favors a higher low followed by a higher high.
Technical Interpretation: A weakening dollar continues to support gold. Any dips in price may be considered potential buying opportunities.
Lower interest rates are extremely positive for the crypto market. When rates fall and liquidity increases, investors typically shift toward riskier assets like cryptocurrencies.
Additionally, the expectation that the Trump administration and the next Fed chair will favor further rate cuts has strengthened market sentiment. As a result, utility tokens may perform even better moving forward.
REMINDER 🚨 FOMC rate cut decision will happen today at 2 p.m. ET. The market is expecting a 88% probability of a 25 bps cut. At 2:30 p.m. ET, Powell’s press conference will start. If Powell hints at QE and more rate cuts, markets will go parabolic.