- At least two rate cuts by the U.S. Federal Reserve in 2025.
- Driven by job market weakness and inflation considerations.
- Potential impacts on cryptocurrency markets, especially BTC and ETH.
Major banks, including J.P. Morgan, anticipate two U.S. Federal Reserve interest rate reductions in 2025, as confirmed by recent Federal Reserve communications.
This potential policy shift may boost risk-on assets like cryptocurrencies, typically seeing increased demand when interest rates are lowered.
Banking giants are predicting at least two interest rate cuts by the U.S. Federal Reserve in 2025. This forecast is based on recent Federal Reserve communications and research from major banks. It signals a shift in monetary policy.
The Federal Reserve Board, led by Chair Jerome Powell, maintains its decision-making approach. At a recent FOMC meeting, Powell emphasized observing inflation and employment metrics. J.P. Morgan’s Michael Feroli supports this outlook due to labor market trends.
Interest rate cuts tend to increase risk appetite among investors. This could potentially boost demand for assets such as major cryptocurrencies. Historical patterns suggest a positive correlation between rate changes and cryptocurrency market performance.
The expected changes in interest rates can have profound financial implications, influencing both traditional institutions and crypto-native funds. This dovish policy may see upward movements in DeFi-linked and Layer 1 assets as risk sentiment changes.
Rate changes are anticipated to shape market dynamics notably. Traders will closely monitor the Federal Reserve’s actions impacting both financial markets and regulatory frameworks surrounding cryptocurrencies. The impacts of these decisions continue to unfold.
Insights into potential outcomes from rate adjustments highlight how BTC, ETH, and other assets might react. Historical trends from previous rate adjustments provide useful data, supporting the expectation of increased yields in DeFi protocols and staking activities.
In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent… The Committee will continue to assess additional information and its implications for monetary policy.” — Jerome Powell, Chair, Federal Reserve BoardFederal Reserve FOMC Statement, July 30, 2025
