On October 31, 2025, the U.S. Federal Reserve’s Federal Open Market Committee (FOMC) voted to cut interest rates by 25 basis points, bringing the target range down to 3.75%–4.0%.
This marks the second consecutive rate cut, following September’s decision that initially boosted both stock and crypto markets. However, this time the reaction was mixed — despite the policy easing, markets turned red after Fed Chair Jerome Powell’s hawkish remarks.
During his post-meeting press conference, Powell emphasized that further policy easing is not guaranteed, noting persistent inflation risks and the Fed’s commitment to stabilizing prices and employment.
“Inflation remains slightly above the 2% target, and expectations have risen, partly due to new tariff policies under President Trump,” Powell stated.
Following his comments, Bitcoin briefly dipped below $108,000, triggering over $825 million in crypto liquidations in 24 hours, mostly from overleveraged long positions.
Powell also highlighted that the Fed plans to end quantitative tightening (QT) — the reduction of balance sheet assets — starting December 1, signaling a shift toward more neutral monetary conditions.
The Fed Chair pointed to a resilient labor market, with low unemployment but slower job creation. However, he warned that a potential U.S. government shutdown could pressure economic growth in the coming months.
The next FOMC meeting is scheduled for December 9–10, 2025. According to CME FedWatch Tool, markets currently price in a 70.4% probability that rates will remain unchanged and a 29.6% chance of another hike.
Economists believe Powell’s tone — more hawkish than expected — drove the sell-off across risk assets, including crypto. Despite this, analysts note that the Fed’s policy shift could still set the stage for a long-term market recovery if inflation moderates in early 2026.
