Fed Decides to Slow Rate Cuts as Bitcoin Plunges

Recently released FOMC minutes show that Federal Reserve officials have decided to slow down the pace of rate cuts in 2025. 

The Fed minutes say that the staff projection at the latest meeting was for economic conditions to remain "solid." 

However, it also underscored uncertainty regarding potential changes to regulatory policies as well as other factors such as possible trade disputes. The inflationary impact of such policies remains uncertain. 

The inflation forecast for the previous year ended up being slightly higher. 

Core inflation has not declined as much as expected in 2024, according to the recently released minutes. 

That said, Fed officials expect inflation to keep moving toward the much-coveted 2% target. However, it could take longer to reach the aforementioned target than initially anticipated. 

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The minutes also show that the U.S. economic activity remains robust, with unemployment remaining at rather low levels.  

As reported by U.Today, the Federal Reserve implemented a "hawkish" 25-basis-point rate cut in December. The Fed signaled that it was inclined to scale back easing in 2025, which took a toll on risk assets such as Bitcoin. 

After recovering back above the $100,000 level, the price of Bitcoin took a significant hit on Tuesday due to key U.S. economic data indicating that inflation might continue to persist. 

Bitcoin is currently changing hands at $94,129, according to CoinGecko data. 

As reported by U.Today, Bloomberg's Mike McGlone recently opined that Bitcoin had emerged as the leading indicator for risk assets due to its high correlation with stocks.