In brief
- The CME FedWatch Tool, which uses futures trading data to infer trader sentiment, predicted a near-certain rate cut.
- The Conference Board’s Expectations Index, a measure of economic sentiment, remained below the threshold that typically signals a coming recession.
- Bitcoin has lingered well below the all-time high it set earlier this month.
The U.S. central bank slashed the interest rate 0.25% on Wednesday, a widely expected move that left crypto markets largely unimpressed, although prices subsequently tumbled when Federal Reserve Chair Jerome Powell said that a December rate cut was "not a foregone conclusion."
Bitcoin was trading at about $110,700, down 1.3% over the past hour. The largest cryptocurrency by market capitalization has sagged more than 10% after dropping below $105,000 earlier this month. Ethereum, the second-largest digital asset by market value, was changing hands at about $3,890, a 2.7% decline gain over the same period.
On Tuesday, the CME FedWatch Tool, which uses futures trading data to infer trader sentiment, predicted a more than 99% probability of the latest rate cut and over 90% chance of a 0.25% reduction in December.
"Today’s decision to drop the federal funds rate another 25 basis points was highly anticipated," Gerry O'Shea, head of global market insights at crypto asset manager Hashdex, wrote to Decrypt. "Bitcoin and many other digital assets responded negatively as Chair Powell commented after the meeting that an additional rate cut this year is not inevitable."
O'Shea added that other factors, including "the government shutdown, tariff policies, and earnings reports from a number of large tech companies may have more of an effect on prices this week."
Central bankers dropped the rate that banks charge each other for overnight lending of reserves held at the Fed to a range between 3.75% and 4%, after jobs data and other economic indicators pointed to a slowing U.S. economy.
"In light of the shift in the balance of risks, the Committee decided to lower the target range," the Fed said in a statement.
As was the case in the Fed's previous monetary meeting, the vote was not unanimous. Stephen Miran, a recent White House appointee to the Fed Board of Governors, voted for a 0.50% cut as he did in September. Jeffrey Schmid voted to keep the rate unchanged.
An interim September jobs report by the Chicago Fed last month showed unemployment remaining around 4.3%, a four-year high. On Tuesday, the Conference Board’s Expectations Index, a widely watched measure of economic sentiment remained below the threshold that typically signals a coming recession.
The Federal Reserve’s concerns trumped those about inflation, which has remained stubbornly above the bank’s target of 2% annually. The Consumer Price Index rose 3% in the 12 months through September, the Bureau of Labor Statistics said, continuing an upward trend that began after a 2.3% reading in April.
On Myriad, a prediction market that tends to offer a more conservative forecast, showed about 90% of respondents expecting the same. (Disclaimer: Myriad is a unit of Dastan, the parent company of an editorially independent Decrypt.)
In a post-decision press conference, Powell said that the bank would "conclude the reduction of its aggregate securities holdings."
The bank has been unloading Treasuries and mortgage-backed securities as it aimed to bolster financial markets and wrestle inflation under control a few years ago when the economy was on shakier ground.
A turn toward less restrictive monetary policy with a higher tolerance for inflation, coupled with lower rates injecting liquidity into markets, could bolster Bitcoin and other risk-on assets, some analysts maintained in the run-up to the Fed’s decision.
Last month, the Fed slashed the federal funds rate by 0.25%, its first cut since last year. The previous inaction had angered U.S. President Donald Trump, who, fearful of being associated with an economic cratering, criticized Powell regularly and threatened to fire him.
Hashdex's O'Shea wrote that while digital asset markets may remain volatile in the near future, investor demand for exchange-traded funds and an improved regulatory environment in the U.S. "continue to support our view that Bitcoin may surpass its previous all-time high later this year."
UPDATE (October 29, 2025, 2:28 p.m. ET): Adds Fed and Hashdex comments and voting details.
UPDATE (October 29, 2025, 3:08 p.m. ET): Updates headline and accounts for decline in prices and Powell comments.
UPDATE (October 29, 2025, 4:25 p.m. ET): Updates first O'Shea quote to reflect Powell comments.