The Federal Reserve has announced a 25 basis points cut in the key interest rate on December 18, 2024. This is the third consecutive rate cut this year. However, the announcement also hinted at the possibility of more rate reductions in the future. The federal funds rate has now been lowered to 4.25% from 4.50%. Although inflation is still slightly above the central bank’s target, it has come down significantly from its peak during the pandemic.
While the immediate effects of this rate cut may not be evident, it is seen as a significant step in the Federal Reserve’s ongoing efforts to gradually reduce rates. Despite the expectation of a rate cut, the overall cryptocurrency market has continued to decline before and after the announcement. There is no sign of a price recovery across the crypto market.
According to Coinmarketcap, the overall cryptocurrency market has experienced a decline of 2.62%. Major cryptocurrencies like Bitcoin, Ethereum, XRP, and Solana have seen price declines of over 2.65%, 2.30%, 4.69%, and 5.15% respectively in the past 24 hours.
Historical data suggests that rate cuts are generally favorable for the financial market, including cryptocurrency. However, analysts believe that the upcoming rate cut may have the least impact on Bitcoin’s price. Some analysts also suggest that the recent rate cut could help the market recover from its recent price decline and regain losses.
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