Powell Doubts December Rate Cut: Why Bitcoin’s Usual Fed Boost Could Falter This Time

Fed chair Jerome Powell’s uncertainty about another rate cut in December could weaken Bitcoin's usual boost from rate cuts. | Credit: Harnik/Getty Images.

Key Takeaways

Federal Reserve Chair Jerome Powell said another rate cut in December is uncertain. Bitcoin’s historical tendency to rally during Fed rate cuts may weaken this cycle. Analysts warn that Bitcoin’s recent gains may be faltering.

Federal Reserve Chair Jerome Powell’s warning that another rate cut in December is “not guaranteed” has rattled markets and raised fresh questions about how shifting monetary policy could impact Bitcoin.

The caution, delivered after the Fed’s second consecutive quarter-point rate cut, signaled that Bitcoin’s historic reaction to interest rate cuts may face new headwinds as policymakers remain split on the future.

Future Cuts Not Guaranteed

The Federal Reserve cut interest rates by 25 basis points this week, the second cut in a row, to support the slowing U.S. economy.

However, Fed Chair Jerome Powell signaled that another cut in December was not guaranteed, despite many traders having expected it.

Speaking at a press conference on Wednesday, Powell said: “A further reduction in the policy rate at the December meeting is not a foregone conclusion, far from it.

“There were strongly different views today. And the takeaway from that is that we haven’t made a decision about December.”

Growing Divisions

Powell’s remarks highlighted widening disagreements within the Federal Open Market Committee over how quickly to loosen monetary policy.

At least one of the central bank’s 12 voting members signaled support for more aggressive rate reductions, arguing that a cooling economy justifies a faster pivot toward easing.

Others, however, remain reluctant to move too quickly, warning that inflation is still above target and that cutting rates too sharply could reignite price pressures.

Powell claimed there was “a growing chorus” to “at least wait a cycle” before moving to make another cut.

CME Group’s FedWatch tool showed expectations for a December rate cut falling to about 56%, down sharply from nearly 90% the previous day.

U.S. equities also wavered as Powell spoke.

The S&P 500, which had briefly reached a record intraday level earlier in the day, slipped 0.2% by midafternoon as investors reassessed the Fed’s next steps.

Acknowledging the tension, Powell said policymakers are contending with opposing “risks to the upside for inflation and to the downside for employment.”

“We have one tool,” he added. “You can’t address both those at once.”

Bitcoin’s Bearish End to 2025

Bitcoin’s rally is showing signs of fatigue, even as Powell’s latest rate cut injects fresh liquidity into global markets.

According to CCN analyst Valdrin Tahiri, Bitcoin has been climbing since its $103,530 low on Oct. 17, but the move remains “contained within an ascending parallel channel.”

Story Continues

Such formations, he notes, “typically exhibit corrective movements, suggesting that an eventual breakdown is the most likely future outcome.”

Tahiri added that Bitcoin touched the channel’s resistance trendline on Oct. 27 and subsequently declined, a pattern that reinforces the view that bullish momentum is fading.

With the total crypto market cap also showing bearish momentum, he cautioned that “the outlook remains uncertain heading into November.”

That uncertainty echoes the broader unease in financial markets following Powell’s warning that another rate cut is “not guaranteed.”

While easier monetary policy has historically supported risk assets like Bitcoin, the Fed’s newfound caution has tempered enthusiasm.

Interest Rates and Bitcoin

Bitcoin has historically moved inversely to the U.S. dollar, meaning a weaker dollar following rate cuts tends to lift BTC as investors seek alternatives that can hold value.

As CCN’s education team noted, lower borrowing costs generally encourage investors to move away from defensive assets like cash and Treasuries toward higher-risk, higher-return instruments.

For Bitcoin, that usually translates into stronger demand and upward price pressure.

Past cycles reinforce the pattern, such as in 2019 and 2020 when Fed cuts coincided with broad rallies in crypto.

However, CCN notes that this cycle may be more volatile.

The Fed’s focus has shifted from inflation to the labor market, where weakness could signal broader economic strain.

If rate cuts are perceived not as proactive support but as a response to deteriorating growth, enthusiasm for speculative assets could fade.

The post Powell Doubts December Rate Cut: Why Bitcoin’s Usual Fed Boost Could Falter This Time appeared first on ccn.com.

View Comments