PDAXSCOPE : Fed rate cut boosts crypto

Fed cuts interest rate by 50 points; crypto market rises in response

The US Federal Reserve lowered its interest rate by 50 basis points on September 18; its first reduction since 2020. From that cut, the target rate range became 4.75% to 5%. In the wake of the decision, BTC rose closer to $US61,000, and other crypto assets similarly followed suit.

Federal Reserve chairman Jerome Powell explained the rate cut as a decision to support the US economy, recognizing slowing inflation and potential unemployment increases. Further rate cuts were stated to potentially follow towards the end of the year.

The 50-point rate cut is part of a broader strategy to encourage borrowing and spending, as multiple sectors are tied to the Fed’s rates. There is an overall benefit for consumers as corresponding loan rates for borrowers are expected to lower as well, although bank interest rates can become less attractive compared to stocks and other assets such as crypto.

For more details, visit the following news sources:

https://www.investopedia.com/bitcoin-price-rises-61000-after-fed-cuts-interest-rates-ether-8714673

https://www.cnbc.com/2024/09/18/fed-cuts-rates-september-2024-.html

https://www.bbc.com/news/articles/cvgl474nrygo

https://www.investopedia.com/the-fed-went-big-with-its-first-rate-cut-here-s-what-markets-think-will-happen-next-8714842