“Fed’s Rate Cut Sparks Debate: Will Bitcoin Lead the Next Rally?”
Hello Steem Users,
I hope you are all doing well. Today I came across an interesting (and a bit surprising) news that I wanted to share with you. As you all know, I always try to keep you updated with fresh and excitin
Divided Views Inside the Fed
U.S. Federal Reserve Chair Jerome Powell made it clear this week that the central bank has no unified plan when it comes to interest rates in 2025. Speaking after the Fed’s first rate cut of the year, Powell explained that the 19 members of the Federal Open Market Committee (FOMC) are split on whether more cuts should follow.
“Ten participants see two or more cuts for the rest of the year, while nine expect fewer — in some cases, none at all,” Powell said.
Fed Projections Through 2027
Powell also pointed to the Summary of Economic Projections (SEP), the quarterly outlook that guides policy decisions. The median forecast sees rates at:
3.6% by end of 2025
3.4% by end of 2026
3.1% by end of 2027
He cautioned, however, that these numbers shouldn’t be read as certainties. “The SEP is better viewed through probabilities and possibilities rather than fixed outcomes,” Powell said.
What It Means for Investors
The Fed’s cautious stance is now rippling through financial markets. Lower interest rates often encourage investors to move out of safe havens and into riskier assets like equities and crypto.
Matt Mena, a strategist at ETP provider 21Shares, noted that $7.2–$7.5 trillion currently parked in money market funds will soon face declining yields. That could push capital back into stocks and alternative assets.
Crypto Angle: Bitcoin in Focus
For crypto, the big question is how far this rate-cut cycle will go. Mena believes it could be the fuel Bitcoin needs for another leg higher. He predicts BTC is “poised for a Q4 rally that could break past its all-time high of $124,000.”
On prediction platform Polymarket, around 62% of traders are betting Bitcoin will touch $130,000 in 2025. If inflows from traditional markets begin shifting, crypto could be one of the biggest beneficiaries.
Final Thoughts
The Fed’s meeting shows that the road ahead for interest rates is anything but clear. But in the uncertainty, crypto investors see opportunity. With billions in sidelined capital and growing optimism around Bitcoin, 2025 could turn into another defining year for digital assets.
The Fed lowered rates by 25 basis points, bringing the benchmark range down to 4%–4.25%. It’s the first cut of 2025, and it comes at a tricky time: inflation is still running high, but the labor market is showing signs of weakness.
What do you think?
What do you think — will the Fed’s uncertain path on interest rates fuel Bitcoin’s next big rally, or is the market getting ahead of itself?