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The U.S. Federal Reserve is set to make its first rate cut of 2025 today. The expected 25-basis-point cut is not a surprise, but what matters more is how many cuts will follow.
The Fed now faces a tough job easing pressure on the weak job market while keeping inflation in check and handling political pressure from Washington.
First Step in the Rate-Cut Cycle
The U.S. Federal Reserve is widely expected to cut interest rates by 25 basis points today, with a 96% chance according to CME FedWatch. Some analysts even see a bigger 50-point cut as possible.
Looking ahead, markets expect six more cuts — three in 2025 and three in 2026. Investors are waiting for the Fed’s Summary of Economic Projections (SEP) to confirm this path. The SEP will show how policymakers view the economy and the pace of rate cuts.
If the Fed follows the expected plan, stocks could stay supported. But any change in the outlook may shake market confidence.
Why Powell’s Words Matter
Beyond the rate cut, all eyes are on Chair Jerome Powell’s press conference. His words could shape market sentiment as much as the decision itself. If Powell highlights persistent inflation risks, investors may scale back hopes for rapid cuts.
But if his tone aligns with market expectations, it could reassure traders that the Fed is committed to supporting growth without losing control of inflation.
Stocks Rally, Crypto Lags
Today’s cut marks the beginning of a new chapter for U.S. monetary policy. But with uncertainty around inflation, jobs, and geopolitics, the path ahead is anything but clear.
Even so, stocks have been climbing as investors bet on easier money conditions. But crypto hasn’t shared the same upside.
Since August, Bitcoin has slipped from $124K to below $112K. Even with looser liquidity, fresh money hasn’t flowed into digital assets as quickly.