Fed Dashes Hopes for December Crypto Rally as Chances of Another Rate Cut Shrink

Core Insights - Federal Reserve Chair Jerome Powell expresses uncertainty regarding another interest rate cut, which could impact crypto prices negatively [1] - The Federal Open Market Committee (FOMC) is divided on the potential for a third rate cut in December 2025, with differing opinions among officials [2][3] Interest Rate Decisions - The FOMC agreed to lower interest rates by 25 basis points to a range of 3.75%–4.00% during their meeting on October 29, following a similar cut in September [3] - Officials are cautious about further cuts unless inflation decreases before the December meeting, indicating a balancing act between supporting the labor market and controlling inflation [4][8] Market Reactions - Prior to the release of the FOMC minutes, the likelihood of a third rate cut was rated at 55%, but this shifted to nearly 70% for no change after the minutes were published [5] - Historically, lower interest rates have been seen as beneficial for the crypto market, attracting investors to riskier assets [6][8] Historical Context - Lower interest rates have previously catalyzed significant bull runs in the crypto market, with Bitcoin rising from approximately $5,000 in March 2020 to an all-time high of $69,000 by November 2021 [9]