On December 18, the US Federal Reserve announced a 0.25% interest rate cut, aligning with market expectations. This decision triggered significant volatility across financial markets, including cryptocurrencies. Fed Chairman Jerome Powell’s cautious remarks during the press conference further amplified investor unease, leading to a sharp sell-off in both stocks and digital assets.
US Fed Rate Cut & Inflation Goals: What You Should Know
The Fed Funds rate was lowered to 4.5%, marking the third rate reduction this year. Previous cuts occurred on:
- September 18: Rate dropped to 5%.
- November 7: Rate adjusted to 4.75%.
Powell emphasized the Fed’s commitment to stabilizing the economy but clarified that future cuts would depend on:
- Economic data trends.
- Inflation risks (currently at 2.7% in November, up from 2.4% in September).
- Labor market conditions.
Market Reactions: Stocks and Crypto Plunge
- Cryptocurrencies: Market cap fell 0.58%; Bitcoin dropped 5.85% to $100,207.97.
- S&P 500: Declined 2.90% post-announcement.
- Altcoins: Ethereum (-4.7%), XRP (-6.8%), and Solana (-3.3%) led losses.
👉 Bitcoin price prediction for insights on market recovery.
Altcoins Face Steeper Challenges
The total crypto market cap (excluding Bitcoin) plummeted 7.74% to $1.42 trillion. Key altcoin performances:
| Coin | 24-Hour Decline |
|------------|-----------------|
| Ethereum | 4.7% |
| XRP | 6.8% |
| Cardano | 4.9% |
FAQs
1. How much did the Fed cut rates?
The Fed reduced rates by 0.25% to 4.5% on December 18, 2024.
2. Why did crypto crash today?
Panic selling followed Powell’s hawkish tone, coupled with the rate cut’s implications for liquidity.
3. What’s next for Bitcoin?
Market sentiment remains volatile. 👉 Track real-time trends for updates.
4. Did trading volume increase?
Yes, by 34.78% to $265.97 billion, signaling heightened investor activity.
Conclusion
The Fed’s cautious stance suggests ongoing market turbulence. Investors should monitor macroeconomic indicators and diversify portfolios to mitigate risks.
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