The Federal Reserve reduced its benchmark interest rate by 25 basis points on Wednesday, shifting the target range to 3.5%–3.75%.

Despite this move, analysts caution that Bitcoin’s price may remain subdued due to uncertainty over the Fed’s future monetary policy direction.

Fed signals only one cut ahead

Federal Reserve Chair Jerome Powell’s comments at the latest FOMC meeting indicated a cautious approach to further rate reductions. Powell stated:

“In the near term, risks to inflation are tilted to the upside and risks to employment to the downside, a challenging situation. There is no risk-free path for policy.”

Market analyst and Coinbureau founder Nic Puckrin noted that the Fed is now expected to implement only one additional rate cut in 2026. He added:

“Attention will turn to liquidity and the Fed’s balance sheet policy in early 2026. However, despite the Treasury bill purchase announced today, quantitative easing isn’t coming until things start breaking, and that always means more volatility and potential pain.”

Impact on bitcoin and market sentiment

Historically, lower interest rates have supported risk-on assets like Bitcoin, but CME Group data shows just 24.4% of traders anticipate a rate cut at the next FOMC meeting in January 2026.

As the bitcoin price remains closely tied to macroeconomic conditions, the Fed’s cautious stance is viewed as a restraint on any immediate rally.

Powell’s outlook and political pressure

Powell described consumer spending and business investment as “solid” but acknowledged that inflation remains above the central bank’s 2% target and that the housing sector is still “weak.”

He also pointed out that the Fed lacks some economic data due to the ongoing US government shutdown.

Meanwhile, President Donald Trump is reportedly considering replacing Powell, with National Economic Council director Kevin Hassett as a leading candidate.

Trump has publicly pressured for more aggressive rate cuts, with Powell’s term set to expire in May 2026.