- Federal Reserve Chair Jerome Powell announced a 0.25% interest rate cut, following a 0.5% cut in September.
- Interest rates are now at 4.5% to 4.75%, with the American economy showing signs of taming inflation.
- Bitcoin rose by 0.8% to $76,614 after the interest rate announcement.
Federal Reserve Chair Jerome Powell just announced the next interest rate in America. After a 0.5% cut in September, the Fed doubled down on its plan to lower interest with the inflation target of 2% in mind. Today, he announced another cut, this time a 0.25% slash.
Moving forward the Central Bank will work with a 4.5 to 4.75% interest rate. Currently, the U.S. inflation sits at around 2.4%.
There was a lot of talk regarding if the Federal Reserve would continue to cut interests in 2024. Especially given that in October the Jobs report showed a drastic lower number than what was expected.
Also, with the recent Donald Trump Presidential election win, many worried that the Republican victory could affect the Federal Reserve’s decision-making.
Overall, the American economy appears to be taming inflation well, with the latest CPI index report showing a small increase of 0.4% above the target.
Bitcoin Up 0.8% After New Interest Rate Announcement
As expected, digital assets reacted favorably to the news of another interest rate cut. In a couple of minutes after the Fed announcement, BTC moved up from $75,984 to the current $76,614.
As of right now, the asset appears to be on its way to recording a new all-time high for the second time in a week.
With the cost of borrowing money lowering as interest rates decrease, risky markets like crypto tend to react favorably. According to Powell’s speech today, the Fed will still look to achieve the 2% inflation target moving forward, which could mean less pressure on assets like Bitcoin.
