The Federal Reserve has lowered interest rates for the third time in a row

On December 10, the US Federal Reserve (Fed) decided to lower its key interest rate for the third consecutive time by 25 basis points, setting it in the range of 3.5-3.75%. This decision was an important step in the context of the current economic situation in the country.

Economic Situation

The Fed's press release notes that available data indicates a moderate increase in economic activity. However, the pace of job growth has slowed, and the unemployment rate has risen slightly compared to previous periods. More recent indicators confirm these trends. Inflation, in turn, has increased compared to the beginning of the year and remains above the target of 2%. The September consumer price index (CPI) growth rate was 3%, compared to 2.9% the previous month.

The Fed emphasized that the committee will continue to closely monitor macroeconomic data to make further decisions on interest rates. Representatives of the regulator also noted the possibility of beginning purchases of short-term Treasury bonds to support reserves, which have decreased.

Cryptocurrency Market Reaction

The interest rate cut caused high volatility in the cryptocurrency market. Bitcoin, the first and most well-known cryptocurrency, reacted to the news with a sharp movement. Within 10 minutes of the news release, the price of Bitcoin tested the boundaries of the $91,600-$93,300 range. At the time of writing, Bitcoin is trading around $93,000.

Ethereum Dynamics

Ethereum, in turn, showed similar dynamics. The asset's price stabilized around $3400, which also indicates the market's reaction to changes in economic policy.

Overall Market Situation

Overall, most cryptocurrencies in the top 10 by market capitalization were in the "green zone" on a short timeframe. The cryptocurrency fear and greed index rose to 26, indicating growing investor interest in cryptocurrencies.

Jerome Powell's Commentary

During a press conference, Federal Reserve Chairman Jerome Powell noted that the macroeconomic situation has remained largely unchanged: inflation and unemployment remain high. He also pointed to the significant impact of the government shutdown on the US economy, emphasizing the need for continued monitoring of the situation.

In Conclusion

Thus, the Fed's interest rate cut was a significant event that affected not only traditional financial markets but also the cryptocurrency market, which continues to demonstrate high volatility in response to changes in economic policy.