Fed Slows Rate Cuts Amid Inflation Concerns

The Federal Open Market Committee cut rates by 25bps, setting a new range of 4.00%–4.25%. Rising PCE inflation concerns led to the decision of slowing down additional cuts as the committee remains cautious about economic uncertainty.

Key leadership includes Jerome Powell and Stephen Miran, the latter advocating for a steeper 50bps cut. Divided opinions among Fed members reflect the complexity of balancing inflation challenges and growth objectives.

The muted 25bps rate cut has affected risk assets, particularly BTC and ETH. Recent policy signals and elevated PCE projections may result in mixed market flows, impacting crypto traders.

The broader macro-financial implications include potential volatility in crypto markets and derivative trades. Investors are watching the next PCE data release, assessing its potential effect on monetary policy outlook.

Economic uncertainty continues as experts evaluate potential risks from elevated inflation. The Fed’s “dot plot” suggests a rate end of 3.5%–3.75% for 2025, hinting at future policy directions.

Historically, rate decisions have led to short-term liquidity boosts and heightened volatility in crypto assets. Monitoring on-chain data and institutional moves becomes crucial to navigate any unforeseen financial twists. Jerome Powell, Chair of the Federal Reserve, stated, “The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated.”