Bitcoin News Today: Fed's Rate Cut: A Balancing Act Between Growth and Inflation Control

The Federal Reserve is set to deliver a 25-basis-point rate cut at its October 28-29 policy meeting, with market expectations nearing certainty. The decision, widely anticipated by economists and traders, reflects a shift in focus from stabilizing inflation to addressing a weakening labor market and economic uncertainty, according to a TradingView roundup. The move is expected to lower the federal funds rate to a target range of 3.75%-4.00%, marking the second cut of 2025 and the first since September, as noted in a Yahoo Finance analysis. While the immediate impact is locked in, the broader implications for financial markets and consumers remain a focal point, per a BondBuyer report.

Mortgage rates have already trended downward, with the 30-year fixed rate falling to 6.27% as of October 16 from a 2025 peak of 7.04%. However, analysts caution that the decline may not yet justify refinancing for most homeowners, as average rates remain above 6%. The Voya GNMA Income Fund's third-quarter report highlights the interplay between Fed policy and mortgage-backed securities, noting that GNMA MBS outperformed Treasuries by 57 basis points amid risk-on sentiment, as explained in the Voya GNMA commentary. Meanwhile, housing activity showed modest improvement, with both new and existing home sales rising, though overall volumes remain subdued by historical standards.

The rate cut's ripple effects extend beyond housing. Credit card rates, currently averaging 20.03%, are unlikely to see meaningful relief from the Fed's action, as variable rates tied to the prime rate (now 7.25%) adjust slowly. Auto loan rates have edged down slightly, with new car loans averaging 7.12% in late October, but high vehicle prices continue to dampen affordability. Analysts like Jonathan Smoke of Cox Automotive predict limited improvement until year-end incentives and potential 2026 rate cuts create more favorable conditions.

Cryptocurrency markets, meanwhile, have priced in the Fed's dovish pivot. Bitcoin's open interest surged to $37.63 billion ahead of the decision, with traders betting on a post-cut rally, according to an UnchainedCrypto report. The broader crypto market saw $921 million in ETP inflows last week, driven by Bitcoin's performance and optimism about monetary easing, per a LiveBitcoinNews report. French lawmakers even proposed a national Bitcoin reserve, signaling growing institutional interest in the asset class.

Equity markets have also responded to the Fed's trajectory. Global equity funds attracted $11.03 billion in net inflows this week, with technology and gold sectors leading the charge, as reported in a Coinotag report. U.S. funds alone drew $9.65 billion, reversing two weeks of outflows, while Asian markets added $2.81 billion. The CME Group, a key Fed policy barometer, saw mixed analyst ratings but maintained a "Hold" consensus as investors weighed rate-cut expectations, according to a MarketBeat filing.

The Fed's next steps, however, remain ambiguous. While most economists anticipate additional cuts in 2025 and 2026, the pace and magnitude depend on inflation trends and labor market data. Quantitative tightening (QT), which has reduced the Fed's balance sheet by $51 billion in the third quarter of 2025, may end by year-end, though some analysts argue for a delay until December.

With inflation easing and trade tensions cooling, the stage is set for a prolonged period of accommodative policy. As Sung Won Sohn, a Loyola Marymount University economist, noted, "The long-term trends in interest rates are downward," though risks from higher tariffs and wage growth persist. For now, markets are pricing in a 96.7% probability of the October cut, according to CME FedWatch, per an FXStreet article, with eyes on how the Fed balances growth support against inflation control.