The Federal Open Market Committee will once again decide on interest rates, which will have far-reaching implications for the cryptocurrency market.
summary
- The FOMC meeting is scheduled for October 28-29, and decisions will be made afterwards.
- Markets widely expect the Fed to continue lowering interest rates.
- Bitcoin could rise further due to rate cut
Investors are bracing for the Fed’s interest rate decisions. The Federal Open Market Committee will hold an important meeting on October 28-29 to discuss the future of interest rates. A decision is expected to be made after the meeting at 2:00 p.m. ET, followed by a press release from Chairman Jerome Powell.
The market is paying close attention to the Fed’s decision, as it will have a major impact on the overall economy. Markets widely expect a 25 basis point (bp) rate cut this month, bringing the federal funds target range to 3.75% to 4.00%. This is the Fed’s second rate cut this year, following its first rate cut in September.
The Fed is likely to continue lowering rates, citing a weakening labor market and cooling inflation. Declining job growth and rising unemployment claims both indicate a weakening job market. At the same time, inflation is lower than expected, despite continuing concerns about tariffs.
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What does the Fed rate cut mean for cryptocurrencies?
Despite continued pressure from the White House, further cuts are not expected. For one thing, the government shutdown has delayed the release of key economic data, meaning the Fed is likely to remain cautious. At the same time, concerns about inflation persist, especially as trade disruptions continue.
When interest rates fall, investors are more likely to take risks. This benefits crypto assets, which are considered high-risk, high-return investments. Still, the announcement is unlikely to immediately boost asset prices, with markets widely expecting a rate cut. Instead, the cryptocurrency market is positioned to continue its bull run.
“If risk appetite is maintained and the Fed avoids a hawkish surprise, we believe cryptocurrencies could experience temporary consolidation and extend their gains into November,” B2BINPAY analysts said. They added that the next potential upside zone is around $118,000 to $120,000.
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