On October 29, 2025, a meeting of the Federal Open Market Committee of the US Federal Reserve (FOMC) was held. According to its results, the regulator decided to reduce the interest rate by 0.25% — to 3.75%-4%.
This is the second consecutive policy easing. In September, the Fed also lowered the interest rate, which had a positive impact on the stock and cryptocurrency markets.
You can learn more about how this rate affects high-risk assets, including cryptocurrency, in a separate piece:
However, the market reacted to the news with a drawdown, despite the overall positive background of Fed policy easing. The reason for this was the speech of the head of the regulator, Jerome Powell.
In particular, bitcoin fell below the $108,000 level at the moment, and the total daily liquidations exceeded $825 million.
The next FOMC meeting is expected to take place on December 9-10, 2025. According to the forecast of the CME exchange, the regulator will leave the interest rate at the current level with the probability of 70.4%, while it will raise it with the probability of 29.6%.
Theses from Powell’s speech
According to experts, it was the “hawkish” tone of the Fed Chairman’s speech that influenced the markets. At the beginning of the press conference, he pointed out that the regulator remains focused on stabilizing prices and achieving maximum employment.
In addition, during his speech, Powell noted the following:
- inflation rate and labor market conditions have changed little compared to September 2025;
- The Fed will end its policy of quantitative tightening, i.e., reducing the amount of money in the economy, effective Dec. 1;
- prior to the shutdown, the economy showed signs of steady growth, fueled by increased consumer spending;
- the U.S. government shutdown will have a negative impact on the economy;
- unemployment remains low, but new job openings growth has also slowed;
- inflation remains slightly elevated relative to the 2% target;
- moreover, inflation expectations have risen, driven by President Donald Trump’s tariff policies;
- baseline scenario – tariffs would lead to a one-time increase in prices, but the Fed also considers the possibility that inflation will rise over the longer term;
- committee members have not reached a consensus on a rate decision in December, there is disagreement among them;
- further interest rate cuts are not a foregone conclusion.
Responding to questions from the press, Powell noted that if the situation in the labor market stabilizes, the Fed will shift its focus to core inflation. In such a case, further movement towards neutral policy is less likely.
Given that the labor market is not showing a clear decline and the outlook for economic growth has improved, further interest rate cuts look unjustified. As for the reasons for its weakening, according to Powell, they consist in the reduction of immigration and employment in general.