Fed cuts interest rates as expected but signals a slow pace of cuts, and the cryptocurrency market reacts poorly

Source: PortaldoBitcoin Original Title: Fed cuts interest rates as expected but signals slow pace of cuts and cryptocurrency market reacts poorly Original Link: The Federal Reserve decided this Wednesday (10) to cut interest rates in the United States by 0.25 percentage points, to a range between 3.50% and 3.75%, marking its third consecutive reduction. The decision was made by a vote of 9 to 3, with members of the Federal Open Market Committee (FOMC) supporting keeping the rate unchanged. Indicators suggest that the cuts will be less intense and slower than previously expected.

The more conservative tone caused the cryptocurrency market to react poorly. Around 4:10 PM (Brasília time), Bitcoin was down 1.2% over 24 hours, trading at US$ 92,704. XRP fell 3.3%, BNB dropped 1.5%, and Solana declined 2.9%. Ethereum, however, stood out with a gain of 0.5%, trading at US$ 3,390.

In a statement after the meeting, the FOMC said: “When considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully evaluate incoming data, evolving outlook, and the balance of risks.”

This was the same language used in December 2024, when it signaled that the committee had likely finished cutting for now. The FOMC had not approved any rate reductions until its September meeting this year. Now, the market assesses that, with three consecutive rate cuts, there is little room for further reductions moving forward.

At the press conference, Fed Chair Jerome Powell said that the reduction puts the Fed in a comfortable position regarding rates. “We are well positioned to wait and see how the economy evolves,” he said.

Another very relevant point was the Fed’s announcement that it will start repurchasing government bonds. This measure acts as an additional tool for injecting liquidity into the global financial system, which tends to benefit all markets.

Tasso Lago, founder of Financial Move, states that the Fed signaling more explicitly the repurchase of bonds should accelerate risk appetite. “Furthermore, the statement brought a more neutral signal for cuts in 2026, indicating that the monetary authority already considers the current level appropriate. Now, we just have to watch the next steps,” he said.

Market awaits cut

The decision was widely expected by the market, both from the CME FedWatch tool and Polymarket bettors. Lower interest rates favor risk assets such as cryptocurrencies, as they reduce the return on more conservative investments like US Treasury bonds, prompting investors to seek better risk and return options, such as stocks and cryptocurrencies.

However, it is important for investors to stay alert, as strong volatility is common during Powell’s speeches. Additionally, the rise of Bitcoin and altcoins between yesterday and today could lead to a “buy the rumor, sell the news” movement, resulting in profit-taking now that the rate cut has been confirmed.

It will also be essential to follow Powell’s comments to understand the Fed’s next steps, since the head of the US Federal Reserve has been adopting a more “hawkish” tone, leaning toward higher interest rates. André Franco, from Boost Research, emphasizes that if this persists today, the market could decline again.

It is worth remembering that Powell’s term is coming to an end, with a deadline in May 2026. Former President Donald Trump has already made it clear how much he disapproves of the current Fed leader’s work and has indicated that economist Kevin Hassett, who has served as an advisor on a trading platform, should be his nominee to lead the monetary authority.