U.Today – The Federal Reserve on Wednesday announced its decision to aggressively cut interest rates by 50 basis points, or half a percentage point, its first cut since March 2020, marking a shift in its approach to monetary policy.
Federal Reserve Chairman Jerome Powell said at a news conference after the decision that beginning the unwinding of the Fed's historic tightening policy with a substantial move while the U.S. economy is still strong will help limit the likelihood of a recession.
“We're trying to achieve a situation where we restore price stability without the painful rise in unemployment that has sometimes accompanied this inflation. That's what we're trying to do, and I think today's action could be seen as a signal of our strong commitment to achieving that goal,” Powell said.
Powell was careful not to commit the Fed to a similar pace going forward, however, saying future actions would be determined by how the economy performs in the coming months.
“I don't think anyone should look at this and say, 'Oh, this is the new pace,'” Powell said. “The economy can develop in a way that makes us move faster or slower.”
The cryptocurrency market reacts
BTC price surged to a three-week high, accompanied by a surge in US stock futures as a massive Federal Reserve interest rate cut rippled through markets. At the time of writing, BTC was up 4.31% in the previous 24 hours to $62,336 and 8% on the week.
Several cryptocurrencies also rose: (ETH), (SOL), (ADA), and (SHIB) were all up between 5% and 8% over the past 24 hours. SUI, TAO, Dogwifhat (WIF), Celestia (TIA), SEI, and FLOKI all recorded gains ranging from 10% to 24%.
Investors are already pricing in an additional 70 basis points of rate cuts at the Fed’s November and December meetings, signaling a much more hawkish stance than policymakers. But Fed Chair Jerome Powell was careful not to commit to a similar pace going forward, saying decisions will be guided by economic data.
However, the cryptocurrency market seems to be ignoring this nuanced perspective, as several cryptocurrencies have seen their gains increase over the past 24 hours.
This article was originally published on U.Today
