The Federal Reserve is signaling a market-implied probability exceeding 91.9% for an interest rate cut during its October 2025 meeting, based on derivative market data from tools like CME FedWatch. This anticipated move follows a quarter-point reduction in September 2025 and stems from the Fed's efforts to address economic shifts.
Jerome Powell, Chair of the Federal Reserve, emphasized data-driven decision-making, stating, "The committee tries to get a complete picture of the biggest downside risks for the economy, and then at the end of the meeting, there needs to be some sort of weighting — it’s an art as much as science." Supported by newly confirmed Stephen Miran, the Fed's approach aims to resist political pressure, focusing instead on economic indicators.
Historically, such rate cuts have boosted cryptocurrency markets by reducing borrowing costs and increasing investor risk appetite. This could enhance liquidity for Bitcoin (BTC), Ethereum (ETH), and DeFi assets, spurring institutional capital inflows and potentially raising Total Value Locked (TVL) in decentralized finance protocols.