#FedRateCutPrediction

A 25 bps rate cut that’s already priced in at an 84% probability is unlikely to cause a massive knee-jerk rally on its own. When expectations are this high, the actual cut often turns into a classic “buy the rumor, sell the news” event. In that scenario, the initial reaction could even be a short-term pullback as traders take profits. What will matter far more than the cut itself is the Fed’s forward guidance specifically how they frame inflation risks, future cuts, and overall economic conditions.
If the Fed delivers a cut and signals that more easing is coming in early 2026, that would likely be strongly bullish for risk assets, including stocks and crypto. Lower rates improve liquidity, reduce the appeal of bonds, and push investors back toward higher-risk, higher-reward assets. This environment historically supports Bitcoin and the broader crypto market quite well.
However, if the Fed cuts but maintains a hawkish tone emphasizing that this is a one-off move and not the start of an easing cycle the market could react with disappointment. In that case, any rebound might be short-lived and followed by consolidation.
My base case is this:
• Short term: Volatility around the announcement, possibly a whipsaw move.
• Medium term: If liquidity conditions truly improve, markets should trend higher into the next quarter.
• Crypto specifically: BTC and majors are likely to benefit more than small caps at first, as capital tends to move into “safer” risk assets before rotating outward.
So yes, a cut can support a rebound but whether it becomes a sustained rally depends much more on the Fed’s tone and the broader liquidity outlook than on the 25 bps cut itself.