Fed cuts interest rate by 50 basis points

The Federal Reserve System of the United States announced a 50 basis points cut in the interest rate, marking the first such move since the start of the COVID-19 pandemic. This decision impacted global financial markets. In particular, the price of BTC surged above $60,000, and the S&P 500 index rose by 0,7%.

Inflation and labor market

The Federal Reserve noted that it now has "greater confidence" in inflation returning to the target level of 2%, although it remains elevated. However, job growth is slowing, and the unemployment rate shows an upward trend.

Traders’ reaction and impact on the crypto market

Before the announcement, traders assessed the probability of a 50 basis points cut at 65% versus 35% for a 25 basis points cut. On the cryptocurrency platform Polymarket, the odds for a 50 basis points cut were 43%, while for a 25 basis points cut, they were 57%.

Such actions by the Federal Reserve positively influence digital gold and other assets due to the potential for cheaper borrowing for their acquisition and an increase in the money supply.