Federal Reserve’s Expected October Rate Cut at 94%
- Chair Powell suggests data-driven policy amid interest rate discussions.
- Potential 25 basis points cut anticipated in October 2025.
- Crypto assets like BTC and ETH may see increased liquidity.
The Federal Reserve is expected to lower its interest rate by 25 basis points in October 2025, with market probability at 94-96%, impacting crypto markets significantly.
Potential rate cuts may boost crypto assets like BTC and ETH, affecting liquidity and institutional investments, leading to increased DeFi activity.
The Federal Reserve is expected to cut its benchmark interest rate during the October meeting, with a market-implied probability now at 94% to 96%, marking significant anticipation for crypto markets.
Key players involved in these decisions include Chair Jerome Powell and Governor Stephen Miran. Recent projections suggest potential rate reductions, with implications for crypto asset prices and DeFi liquidity.
Financial markets might experience heightened volatility as institutional allocators shift into cryptocurrencies. Historically, rate cuts boost asset attraction, evident in BTC and ETH, which rally due to reduced yield competition. Arthur Hayes, Co-founder, BitMEX, highlights, “When the Fed goes brrr, so does crypto.”
The implications extend to stablecoins and DeFi, where demand and liquidity typically increase post-Fed announcements, facilitating borrowing and lending activities within the ecosystem.
Insights suggest increased participation from institutional investors in crypto. Markets react positively to forward guidance, with previous behavior indicating heightened on-chain activity and risk asset swaps.
CME derivatives data points to a strategic positioning ahead of the Federal Reserve’s expected move. Insights suggest that regulatory shifts could impact liquidity flow and staking deposits as new liquidity flushes into the system.
