The U.S. Federal Reserve cut its benchmark interest rate by 25 basis points on Thursday, lowering it to a range of 4.50% to 4.75%. Fed Chair Jerome Powell indicated that despite the rate reduction, monetary policy remains restrictive, stating that the Fed is carefully assessing incoming economic data to gauge future policy moves.

According to a statement from the Federal Open Market Committee (FOMC), "Recent indicators suggest that economic activity has continued to expand at a solid pace. Inflation has made progress toward the Committee's 2% objective but remains somewhat elevated."

In the press conference following the announcement, Powell responded to questions regarding the Fed’s stance under President-elect Donald Trump’s recent election victory. Powell assured that the election outcome would have “no effect” on the Fed’s short-term policy decisions, countering speculation that Trump’s administration could push for more aggressive rate cuts. Powell added that he would not resign if Trump pressured him to leave, noting that federal law protects the Fed chair from being fired or demoted by the president.

Bitcoin’s price surged following the Fed’s decision, reaching a new all-time high of over $76,000 before settling slightly lower. This marks a 1.6% gain over the previous 24 hours. Bitcoin’s upward movement followed a broader rally in U.S. financial markets, with the S&P 500 up 0.8% and the tech-heavy Nasdaq gaining 1.5% on Thursday.

The Fed’s rate cut comes shortly after the Bank of England and Sweden's Riksbank also reduced rates by 25 basis points and 50 basis points, respectively, suggesting a trend among major central banks to ease monetary conditions in response to global economic challenges. Market expectations for a Fed pause in December have now dropped from 33% to 28%, according to CME FedWatch Tool data.

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