Fed slashes interest rates, but issues mixed forward guidance
Analysis
Price Impact
HighWhile the fed slashed interest rates by 25 basis points, which is generally bullish for risk-on assets like bitcoin, the mixed forward guidance from jerome powell and the expectation of only one more rate cut in 2026 will likely quell a sustained price rally by removing a key bullish catalyst.
Trustworthiness
HighInformation sourced from cointelegraph, citing direct statements from federal reserve chair jerome powell, analysis from market experts like nic puckrin (coinbureau founder), and data from cme group regarding market expectations.
Price Direction
NeutralThe immediate rate cut is a positive signal, but the lack of clarity on future cuts and the long wait until 2026 for the next expected cut creates significant uncertainty, likely preventing a strong, sustained bullish rally for now. volatility is expected due to this ambiguity.
Time Effect
LongThe impact is long-term as the 'rate-cutting cycle' is not expected to fully resume until 2026, meaning the market will lack this major monetary stimulus for an extended period. attention will shift to liquidity and the fed's balance sheet in early 2026.
Original Article:
Article Content:
Vince Quill 3 minutes ago Fed slashes interest rates, but issues mixed forward guidance A lack of clarity on future interest rate cuts under Jerome Powell's leadership has placed a damper on a Bitcoin price rally, analysts say. Listen 0:00 News COINTELEGRAPH IN YOUR SOCIAL FEED The Federal Reserve slashed interest rates by 25 basis points on Wednesday to a target range of 3.5% to 3.75%. However, mixed comments from Federal Reserve Chair Jerome Powell will likely quell a Bitcoin price rally until the rate-cutting cycle resumes in 2026, analysts say. “In the near term, risks to inflation are tilted to the upside and risks to employment to the downside, a challenging situation. There is no risk-free path for policy,” Powell said at Wednesday’s Federal Reserve Open Committee (FOMC) meeting . These comments were not as “hawkish” as some analysts expected, but the Federal Reserve is now expected to issue only one rate cut in 2026 under Powell’s leadership, according to market analyst and Coinbureau founder Nic Puckrin. He added: “Attention will turn to liquidity and the Fed’s balance sheet policy in early 2026. However, despite the Treasury bill purchase announced today, quantitative easing isn’t coming until things start breaking, and that always means more volatility and potential pain.” Low Interest rates fuel risk-on assets , such as Bitcoin ( BTC ), but only 24.4% of traders expect a rate cut at the next FOMC meeting in January 2026, according to data from the CME Group. Interest rate target probabilities for January 2026. Source: CME US President Donald Trump has been weighing Powell’s replacement , with National Economic Council director Kevin Hassett widely reported as the frontrunner for the position. Hassett is also a former adviser on Coinbase’s Academic and Regulatory Advisory Council Related: Short the dip and buy the rip? What FOMC outcomes reveal about Bitcoin price action Powell gives mixed remarks, but Trump says the next Fed chair will slash rates Powell said consumer spending and business investment remain “solid” and added that layoffs and hiring remain low. However, inflation remains “somewhat elevated” above the Federal Reserve’s 2% inflation target, while the housing sector is considered still “weak.” The Fed reached these conclusions using available market data, but Powell acknowledged that it is missing months of public economic reports due to the US government shutdown . Jerome Powell delivers remarks following the December 2025 FOMC meeting. Source: Federal Reserve Trump has already pressured the next Fed chair to slash rates. Powell’s term is set to expire in May 2026. Magazine: Meet the onchain crypto detectives fighting crime better than the cops # Bitcoin # Bitcoin Price # Interest Rate # Market Release Add reaction