The Federal Reserve has cut its benchmark interest rate by 25 basis points to a target range of 4.00%–4.25%, ending a nine-month pause in monetary easing.
The move, widely anticipated by markets, marks the fourth reduction since September 2024 and reflects policymakers’ growing concern over a weakening U.S. labor market.
Recent data from the Bureau of Labor Statistics showed just 22,000 jobs created in August, down sharply from 79,000 in July.
Average monthly job gains have fallen to 29,000 over the last quarter, a pace signaling stagnation.
Fed officials acknowledged the slowdown in their September statement, downgrading earlier assessments that described labor conditions as “solid.”
The decision was not unanimous.
Stephen I. Miran, a Trump appointee who joined the board after Adriana Kugler’s resignation, pushed for a deeper 50-basis-point cut.
The political backdrop remains tense, with President Donald Trump criticizing Chair Jerome Powell as “Mr. Too Late” and questioning the Fed’s independence.
For markets, the rate cut comes at a pivotal moment.
Bond yields had already been declining, equities have pushed to new highs, and Bitcoin briefly reclaimed $115,000 ahead of the decision.
Lower borrowing costs traditionally fuel appetite for riskier assets, though the immediate market reaction often carries volatility.
“Yields on bonds had been falling, stocks were rallying, and Bitcoin rallied back above $115K into the decision,” said Nic Puckrin, CEO of Coin Bureau told Yellow Media. “Cheaper money equals more risk appetite, and crypto is standing at the front of the line for that liquidity inflow.”
Still, Puckrin cautioned against reading too much into near-term price swings.
“This cut was well telegraphed, so a classic ‘sell the news’ reaction is possible. The real test is whether liquidity rotates into sustainable areas like Bitcoin, Ethereum, or tokenized assets rather than fleeting memecoin spikes,” he added.
Other analysts stressed that policy easing alone may not be enough to sustain crypto momentum.
“Equities are likely to see the clearest benefit first, but crypto historically amplifies these moves later in the cycle,” said Javed Khattak, co-founder of Cheqd. “For that to materialize, the market needs more than monetary policy — regulatory clarity is key.”
Markus Levin, co-founder of XYO, noted that with the Fed now pivoting, investors are already pricing in two additional cuts by year-end.
“The move could signal a resurgence in a crypto alt season as borrowing costs drop and investors shift capital into higher-risk assets,” Levin said.
While a 25-basis-point reduction may seem modest, analysts agree it signals the start of a looser policy phase.