Fed Cuts Rate by 50bps, Surprises Market With Dovish Dot-Plot – Here’s How Bitcoin (BTC) Reacted
2024-09-19

Bitcoin (BTC) saw choppy, albeit bullish, price action on Wednesday after the Fed cut rates in the US by 50bps to 4.75-5.0%, and signaled more interest rate easing than the market had been anticipating in 2025 in its updated dot-plot.
FOMC Cuts Rates By 50Bps; Target Range Stand At 4.75% – 5.00%– Cut Interest On Reserves Balances By 50Bps To 4.90% — LiveSquawk (@LiveSquawk) 
The price of Bitcoin swung between $60,000 and $61,000 in the aftermath of the Fed rate cut announcement. 
Going into this week’s meeting, Wall Street had been split over whether the Fed would cut interest rates for the first time since 2020 by 25 or 50bps. 
So to the target range of the federal funds rate would have come as a surprise to some market participants. 
But that wasn’t the only dovish aspect of the policy announcement. 
The Fed’s graphic showing the interest rate forecasts of its members, called the dot-plot, showed that the median Fed policymaker expects a further 150bps in rate cuts by the end of 2025. 
Fed cuts rates by 50bps and signals more cuts to come. Dot plot shows the funds rate falling to 4.25-4.5% this year, suggesting one more 50bp move or two 25bp cuts at the two remaining meetings this year. Another 100bps of cuts projected for next year. — Colby Smith (@colbyLsmith) 
New economic projections were also released. The Fed expects inflation to continue falling towards 2.0% and for the unemployment rate to stabilize around its current level between now and 2026.
Focus will now turn to Fed Chair Jerome Powell, who will conduct a press conference in a few minutes to discuss the policy decision. 
But the ingredients for a Fed-fueled rally in crypto markets appear to be falling into place. 
The Fed looks intent on aggressively lowering interest rates, but remains upbeat on the economy. 
As long as US recession fears don’t suddenly surge back, the stage could be set for BTC heading back towards $70,000. 
And Fed rate cuts lower recession risk. 