Fed’s 25 Basis Point Rate Cut Shakes Markets

• Lyla Velez
• September 18, 2025
• Market
• 0 Comments

Jerome Powell, Chair of the Federal Reserve, announced a 25 basis point rate cut at the latest FOMC meeting, reducing the federal funds rate to 4%–4.25%. The decision, lacking support for a larger cut, reflects cautious economic assessment.

This decision highlights the Fed’s strategy to address persistent inflation and employment risks, while market participants reacted with uncertainty, reflecting on future economic conditions.

The Federal Reserve’s recent rate cut follows a meeting chaired by Jerome Powell, where the committee opted for a 25 basis point reduction. Powell emphasized the importance of a balanced approach in the face of continuing inflation risks. Powell stated,

“There wasn’t widespread support at all for a 50 basis point cut today…”

The decision involved various stakeholders, including FOMC members like Stephen I. Miran, who advocated a larger cut. However, broad consensus favored a 25 basis point reduction, signifying shifts in economic policy.

Immediate market reactions to the Fed’s decision included heightened volatility in U.S. Treasuries and risk assets such as BTC and ETH. Shifts in monetary policy often alter investor sentiment and funding conditions. Historically, Federal Reserve cuts have provided temporary boosts to risk assets like Bitcoin and Ethereum. As these assets are sensitive to U.S. monetary policy, potential ramifications could unfold as market conditions adjust.

The reduction impacts short-term interest rates across financial markets. Powell’s statement addresses ongoing inflation concerns and potential implications on employment stability and sector dynamics.

The decision may influence regulatory, financial, and technological adjustments globally. Industry experts and stakeholders will watch for further developments that might arise from this shift in monetary policy.