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Bitcoin and the cryptocurrency market maintained positive momentum after the Federal Reserve implemented its first rate cut since Donald Trump’s election win.
On Nov. 7, the Federal Reserve announced a 25 basis point reduction in U.S. funding rates at this month’s Federal Open Market Committee meeting, continuing the monetary easing started in September with a 50bps cut.
Bitcoin (BTC) remained above $76,000, and the total crypto market remained solidly in the green. Wall Street surged after the meeting while the CBOE Volatility index dipped.
However, cryptocurrency prices were generally unchanged from before the meeting. Social media commentators have theorized that FOMC decisions may have smaller impacts on digital asset prices moving forward.
Meanwhile, proponents noted that the Fed removed language pointing to “greater confidence on inflation.” Speculators said the changes were likely due to the elections and possible alterations to monetary policies.
Addressing the debates, Fed chair Jerome Powell said central bank regulators would not switch strategy due to short-term inflation data or electoral results.
The statement changes weren’t designed to serve as forward guidance. Removing language about greater confidence” on inflation is characterized as a drafting step.
Jerome Powell, Federal Reserve chair
Trump and Powell have notoriously butted heads over the Fed’s approach to interest rates. Despite appointing the Fed chair in 2017, Trump criticized Powell for adopting a conservative rate environment. At the time, Trump claimed that Powell’s policies slowed U.S. economic growth.
Rumors have floated over Powell’s potential resignation once Trump takes office in January. Responding to questions at a post-FOMC press conference, Powell said he wouldn’t step down if asked by Trump.