All about the Fed’s latest rate cut and ‘potential move to $150K Bitcoin’

Key Takeaways

Why did the Fed make this shift?

Policymakers hinted at easing inflation, softer labor market conditions, and rising downside risks to economic growth.

How did Nomura react to the Fed’s decision?

Nomura now expects the Fed to keep rates unchanged in December, instead of cutting them again.

The U.S Federal Reserve has officially entered an easing phase.

In a policy move widely anticipated by markets, the central bank lowered interest rates by 25 basis points on 29 October, setting the new federal funds’ target range at 3.75%–4.00%.

Fed rate cuts stir market sentiment

The decision marks the first rate cut since 2023 and comes alongside confirmation that the Fed will end quantitative tightening (QT) by 1 December, drawing a close to its balance-sheet unwind.

The shift also signals a notable recalibration in the Fed’s priorities.

While inflation remains above the 2% target, policymakers highlighted cooling price pressures, softer labor data, and growing risks to economic momentum as key reasons for pivoting toward support, rather than restraint.

Following the announcement, Nomura revised its outlook for the Fed’s next policy move.

The firm now expects the central bank to hold rates steady in December, reversing its earlier projection of an additional 25 basis point cut. 

Nomura and a strategist at 21Shares weigh in

Remarking on the same, Nomura noted, 

“Data are likely to be modestly dovish in the months ahead, but we doubt the weakness will be sufficient to rekindle FOMC concerns of a deteriorating labor market.”

According to Reuters, Fed Chair Jerome Powell has also cautioned that any additional easing this year will not be guaranteed.

He pointed to internal divisions among policymakers and gaps in available economic data as factors that could slow the pace of future cuts. In doing so, he stressed the need to avoid missteps while conditions remain uncertain.

Sharing further insights, Matt Mena, Crypto Research Strategist at 21Shares, said,

“Overall, Bitcoin’s resilience amid macro crosscurrents and aggressive deleveraging underscores how structural demand – anchored by ETF inflows and a more dovish policy outlook – continues to provide a floor.”

He added, 

“With leverage flushed, policy easing approaching, and structural demand accelerating, the setup into year-end appears increasingly constructive for digital assets – setting the stage for a potential move toward $150K Bitcoin as macro tailwinds and institutional flows continue to align.”

What is the market trend suggesting?

Despite the volatility, Bitcoin [BTC] has held its footing, supported by strong structural demand. U.S-listed Bitcoin ETFs have attracted over $6 billion in inflows this month, pushing global crypto ETF AUM towards $300 billion.

Potential policy shifts expanding retirement account access, alongside reduced sell pressure from U.S government BTC holdings, further strengthen the long-term backdrop.

However, sentiment is yet to fully reflect these improving fundamentals.

In fact, the Crypto Fear and Greed Index’s reading of 32 indicated that caution remains the norm in the short term – A sign that bullish continuation may take time to materialize.