Fed cuts interest rates by 0.25%, does not commit to further adjustments next month
As predicted and expected by the market, the meeting in the early morning of October 30 (Vietnam time) of the US Federal Reserve (Fed) ended with the announcement of a 0.25-point cut in the basic interest rate at the FOMC meeting, bringing the target interest rate to the range of 3.75 - 4%.
This is the second consecutive cut this year, 1 month after a similar action on September 18. The Fed said the risks of increased employment, slower growth, while inflation is still around 3%, higher than the target of 2%.
Voting results:
Eleven FOMC members, including Chairman Jerome Powell, Vice Chairman John Williams, and governors Barr, Bowman, Collins, Cook, Goolsbee, Jefferson, Musalem, Schmid and Waller, supported the 0.25% cut.
Stephen Miran voted against, proposing a 0.5% cut - while Jeffrey Schmid (St. Louis Fed) wanted to keep rates unchanged.
Notably, the meeting took place amid a lack of economic data this month - the Nonfarm Payrolls report and manufacturing output - due to the temporary government shutdown , with only the US CPI released on October 24, and US-China trade tensions showing signs of easing .
Details of Fed Chairman Jerome Powell's speech
- Fed Chairman Jerome Powell stressed that the decision to cut by 25 basis points was made in the context of increased employment risks, slowing growth, while inflation remained above the 2% target.
- Notably, the Fed Chairman said that he would end the quantitative tightening (QT) program from December 1 - a program that allows assets such as Treasury bonds and mortgage-backed securities to mature without reinvesting the proceeds - a move XEM as "injecting hidden liquidation " into the financial system, marking a turning point in the monetary easing cycle.
- Responding to the next rate cut at the following FOMC meeting, Jerome Powell implied that he was not committed to another rate adjustment in December:
“Another rate cut in December is far from certain...the lack of economic data amid the government shutdown will weigh on the December decision.
The recent rise in inflation is largely due to tariffs, but this may be a temporary or one-off factor. Without the impact of tariffs, inflation would likely be close to the Fed's 2% target by now."
The significance of the Fed's decision to lower interest rates
The 0.25% rate cut marks the Fed’s second consecutive cut this year, reinforcing expectations that the monetary easing cycle is really starting. This creates a “risk-on” signal, encouraging money to flow back into stocks, gold and cryptocurrencies.
The Fed's rate cut means:
- Cheaper cost of Capital , stimulating businesses and investors to move away from safe assets (USD, bonds).
- The USD temporarily weakened, giving an advantage to gold and Bitcoin.
- However, the lack of clear direction for December could lead to sharp short-term market volatility, especially as investors are betting heavily on a sharp cutting cycle.
- Cheaper cost of Capital , stimulating businesses and investors to move away from safe assets (USD, bonds).
The market is now betting on another cut in December, building expectations for a policy easing cycle - a factor that supports bullish sentiment in financial markets, as investors believe risks are low and tend to pour money into high-risk assets in search of returns.
Lowering interest rates could also temporarily weaken the US dollar, a positive signal for Bitcoin and gold (an inflation hedge).
Related context
- Before the meeting, the market was pricing in a near certainty of a 25bp rate cut on CME FedWatch at ~97.8% and Polymarket at ~98%.
- CoinShares Head of Research James Butterfill predicts the Fed will cut rates by a total of 0.75 basis points in 2025 (25 basis points this month + 50 basis points in December).
75bps in sight?
— CoinShares (@CoinSharesCo) October 24, 2025
Expectations for Fed rate cuts build as inflation softens.
Bitcoin flows tell the story: confidence is creeping back.
Read @jbutterfill 's latest update pic.twitter.com/6M045EKC54
- Political context: The meeting between President Donald Trump and Chinese President Xi Jinping at 9 a.m. the same day in South Korea and the temporary US government shutdown reduced the amount of economic data, leaving the Fed with little room to provide new information.
QCP: The Fed is expected to cut rates by 25bps but without clear conviction due to limited data, while US-China trade eases slightly ahead of a Trump-Xi meeting. AI continues to drive gains in chip and data center stocks amid bubble fears. Concerns rise that stock…
— Wu Blockchain (@WuBlockchain) October 29, 2025
- This is the second consecutive interest rate cut by the Fed in 2025, just 1 month after a similar action on September 18. At that time, the cryptocurrency market also immediately reacted positively when "green" covered all coins, except BTC. But just 2 weeks later, Bitcoin successfully conquered a new ATH mark of 126,000 USD in the context of widespread "Uptober".
Update on market reaction
In the long term, the interest rate cut and the suspension of the quantitative tightening program from December 1 will create a positive trend for the financial market. However, in the short term, the uncertainty in the December interest rate cut plan has created anxiety among investors.
Bitcoin immediately turned negative, falling more than 4% from trading above $111,500 to below $110,000, partly because the market had already bet on the 0.25% scenario, partly because the possibility of the Fed cutting interest rates in December was still uncertain.
Bitcoin price movement in the last 24 hours, screenshot on Coingecko at 02:00 AM on October 30, 2025
Not only Bitcoin, other large- Capital coins such as ETH, XRP, BNB, SOL, TRX... also immediately "turned red" with a minimum decrease of more than 3%.
Movements of top 100 cryptocurrencies, Coin360 screenshot at 02:00 AM on October 30, 2025
Liquidation data on CoinGlass shows that in the last 24 hours, there were 850 million USD in positions liquidated, with 658.92 million USD being Longing orders (accounting for 77.5% of the total liquidation value), reflecting the short-term investor panic, as most of them are still fragile after the biggest flash crash in history of 19 billion USD earlier this month.
Derivative Market Liquidation Data, CoinGlass screenshot at 02:00 AM on 10/30/2025
The FOMC statement caused the probability of another Fed rate cut in December on the CME FedWatch tool, and the Polymarket prediction market, to drop from 90% to 70%.
The community puts a 70% chance the Fed will have another 0.25 point interest rate cut in December. Source: Polymarket (October 30, 2025)
Conclude
The Fed opened its easing cycle with this 0.25% cut, but did not commit to another rate cut in December, contrary to market expectations.
The Fed announced the end of the QT program, a strong signal for Capital flows from risk, because this move is equivalent to injecting underground liquidation back into the financial market, potentially creating a favorable environment for risky assets (such as crypto, stocks...).
Jobs worries take center stage: State unemployment data continue to show weak employment, even as inflation hovers around 3% — above the Fed’s 2% target. If the trend continues, many experts believe the Fed will have to continue cutting interest rates further in 2026 to support the economy.
Economist Luke Tilley (Wilmington Trust) predicts that the Fed may continue to lower interest rates in December, January, March and April 2026, gradually bringing interest rates to the neutral zone of 2.75% - 3%.
Crypto investors should prepare for strong short-term volatility due to profit-taking and liquidation risks, but the long-term is an opportunity for new money to flow in.
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