The US Federal Reserve is expected to cut rates three times this year, that is, in 2025. All three rate cuts may reportedly happen in the next three Fed meetings. Rate cuts have triggered expectations for crypto prices to rise further by the year-end. US inflation and the labor market are believed to be key factors behind rate cuts.
The US Federal Reserve last cut rates in December 2024 by 25 basis points (bps). This brought the target range to 4.25% and 4.50%. According to a report by Reuters, the US Federal Reserve may once again cut rates in September, October, and December this year. Every meeting is expected to see a cut of 25 bps in US interest rates.
Morgan Stanley and Deutsche Bank had earlier forecasted two cuts in September and December, of 25 bps each. The Chief U.S. economist at Deutsche Bank, Matthew Luzzetti, said that there were no forecasts for 2026. The most optimistic rate cut prediction came from Standard Chartered. The bank said September could see a cut of 50 bps.
Two factors are in consideration for the US Federal Reserve to cut rates in its next 3 meetings. These are rising inflation and a slowing job market. The US inflation was recorded at 2.92% as of August 31, 2025. The lowest value that it touched this year was 2.31% as of April 30, 2025. The inflation rate has, since then, constantly increased.
The highest inflation was 3% reported on January 31, 2025, still away from the target milestone of 2%. While it noted a constant decline, May 31, 2025, marked a turning point when reports emerged with a higher US inflation rate. Nevertheless, the current rate is far away from the peak of 9.06% which was reported on June 30, 2022, as shown on ycharts.
Rate cuts by the US Federal Reserve are often seen as leaving a positive impact on crypto prices. Rate cuts hand over a higher borrowing power to investors, who then take this as an opportunity of diverting their funds to risky assets. The higher the investments flow into the crypto market, the higher the crypto prices are known to rise.
Most of the cryptocurrencies are performing with upticks in their value when the article is being drafted. According to data from CoinMarketCap, BTC prices and ETH prices have surged by 0.90% and 4.89%, respectively, in the last 24 hours. Their values are $116,020.80 and $4,729.80, applicable in the same order, at the moment.
It is important to note that crypto trading and investments are subject to volatility. One should do thorough research and risk assessment before allocating funds to cryptocurrencies. This article is neither a recommendation nor advice.
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