Key Takeaways
Why did the Fed make this move?
Policymakers pointed to declining inflation, softer labor market conditions and increasing downside risks to economic growth.
How did Nomura react to the Fed’s decision?
Nomura now expects the Fed to leave rates unchanged in December, rather than cutting them again.
The US Federal Reserve has officially entered an easing phase.
In a policy move widely anticipated by markets, the central bank cut rates by 25 basis points on October 29, setting the new federal funds target at 3.75%–4.00%.
Interest rate cuts by the Fed are fueling market sentiment
The decision marks the first rate cut since 2023 and is accompanied by confirmation that the Fed will end quantitative tightening (QT) on December 1, putting the end of the balance sheet in sight.
The shift also signals a notable recalibration of the Fed’s priorities.
While inflation remains above the 2% target, policymakers pointed to easing price pressures, weaker labor data and rising risks to economic momentum as key reasons to focus on support rather than restraint.
Following the announcement, Nomura revised its outlook for the Fed’s next policy move.
The company now expects the central bank to keep interest rates stable in December, reversing its previous projection of an additional 25 basis points cut.
Nomura and a strategist 21Weighing shares in
I’m noticing the same thing, Nomura noted,
“Data is likely to be modestly subdued in coming months, but we doubt the weakness will be enough to reignite the FOMC’s concerns about a deteriorating labor market.”
According to Reuters, Fed Chairman Jerome Powell has also warned that further easing is not guaranteed this year.
He pointed to internal divisions among policymakers and gaps in available economic data as factors that could slow the pace of future cuts. He emphasized the need to avoid missteps as long as circumstances remain uncertain.
Matt Mena, Crypto Research Strategist at 21Shares, said to share further insights:
“Overall, Bitcoin’s resilience amid macroeconomic cross-currents and aggressive deleveraging underlines how structural demand – anchored by ETF inflows and dovish policy prospects – continues to provide a floor.”
He added:
“With debt burdens reduced, policy easing underway and structural demand accelerating, the year-end setup looks increasingly constructive for digital assets – paving the way for a potential move towards $150,000 Bitcoin as macro tailwinds and institutional flows continue to align.”
What does the market trend suggest?
Despite the volatility, Bitcoin remains [BTC] has held up, supported by strong structural demand. US-listed Bitcoin ETFs have attracted more than $6 billion in inflows this month, pushing the global crypto ETF AUM towards $300 billion.
Potential policy shifts that increase access to retirement accounts, in addition to reduced selling pressure from U.S. government BTC holdings, further strengthen the long-term environment.
However, sentiment does not yet fully reflect these improving fundamentals.
Basically the Crypto Fear and Greed Index reading of 32 indicated that near-term caution remains the norm – a sign that it may take some time for a bullish continuation to materialize.