Institutional flows and regulatory clarity will decide if Bitcoin, Ethereum, and other assets can sustain momentum after the Fed’s policy shift.
On September 17, 2025, the United States Federal Reserve announced a 25 basis point reduction in its policy rate, bringing the target range down to 4.00%-4.25%. This is the first cut since December 2024 and comes after a long period of holding rates steady in an effort to balance inflation control with slowing growth.
The Fed made this move because recent economic data suggested that the labor market is beginning to weaken, even though inflation has not fully come down to its 2% target. The core personal consumption expenditures index, which is the Fed’s preferred inflation gauge, stood at around 2.9% in July, showing progress but still above the goal.
Members of the Federal Open Market Committee indicated that there could be up to two more cuts before the end of the year, depending on how economic data evolves. However, not everyone agreed on the pace of easing. Some policymakers wanted larger cuts, while others preferred to wait for more evidence of economic slowdown before committing further. This cautious approach has been closely watched by global markets, including the cryptocurrency sector.
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