Federal Reserve Cuts Interest Rates Amid Cooling Labor Market

John C. Williams of the Federal Reserve Bank of New York announced that the Fed cut interest rates due to a cooling labor market and easing inflation risks.

This decision could encourage investment in cryptocurrencies like Bitcoin and Ethereum, despite inflation remaining above target, as borrowing costs are reduced.

Federal Reserve Lowers Rates by 25 Basis Points

The Federal Reserve, led by Jerome Powell, addressed concerns over high inflation amid cooler labor conditions by cutting rates. Williams emphasized that last week’s action reflects favorable economic signals and continues trends from earlier 2025 cuts.

The rate reduction is expected to bolster investment by cutting financing costs for businesses. Risk assets like Bitcoin (BTC) and Ethereum (ETH) may experience increased demand, though immediate market reactions remain muted.

Historical Cuts Linked to Crypto Investment Gains

Did you know? The Fed’s decision marks the third consecutive 25 basis point cut for 2025, reflecting continued economic easing amid inflation risks. These adjustments mirror similar cycles post-2022 when rates were drastically lowered.

Bitcoin (BTC) holds a current price of $86,885.15, with a market cap of 1.73 trillion USD and dominance at 58.42%. The 24-hour volume saw a decrease of 37.82%, aligning with a 2.39% price drop—reported data sourced from CoinMarketCap on December 15, 2025. BTC experienced declines in overall performance, with notable decreases of 25.03% over 90 days.

The Coincu research team suggests regulatory outcomes may further influence crypto markets if reduced interest rates persist. Historical data links low-rate environments to increased investment, potentially spurring technological developments in cryptocurrency infrastructure.