Fed Chair Powell Casts Doubt on December Rate Cut as Crypto Markets Drop
TLDR
Federal Reserve Chair Jerome Powell said a December rate cut is “far from certain” after the Fed delivered a 25 basis point cut in October
Bitcoin fell to nearly $108,000 and Ethereum dropped below $3,910 following Powell’s cautious remarks about future rate cuts
The Fed ended its balance sheet runoff program starting December 1, citing adequate liquidity levels in the system
Crypto markets saw $817 million in leveraged futures liquidations over 24 hours, with 165,000 traders forced to close positions
Powell noted Fed officials have “strongly different views” on whether to cut rates again in December, citing elevated inflation
The crypto market declined Tuesday after Federal Reserve Chair Jerome Powell said another interest rate cut in December is “far from certain.” His remarks came after the Fed reduced rates by 25 basis points at its October meeting.
JUST IN: 🇺🇸 Fed Chair Jerome Powell says December interest rate cut is “far” from certain. pic.twitter.com/IbTs0sVriM
— Watcher.Guru (@WatcherGuru) October 29, 2025
Powell spoke following the Federal Open Market Committee meeting. He said the U.S. labor market is weakening while inflation remains “somewhat elevated.” The Fed chair added that recent data shows the economic outlook has not changed much despite earlier signs of softening.
The October rate cut matched the 25 basis point reduction from the previous month. The Fed made these cuts to address slowing economic growth and rising borrowing costs. However, Powell’s comments suggest the easing cycle may pause.
Powell revealed that Fed officials hold “strongly different views” about cutting rates in December. He stated clearly that another reduction is not guaranteed. “A further reduction in the policy rate at the December meeting is not a foregone conclusion. Far from it,” Powell said.
The Fed also announced it will end its balance sheet runoff starting December 1. Powell said reserves have reached levels consistent with ample liquidity. He noted that repo rates and funding costs have increased lately, prompting this decision.
Market Reaction to Powell’s Comments
Bitcoin fell 1.49% to $111,237 after Powell’s remarks. Ethereum dropped 1.07% to $3,937 according to TradingView data. Both cryptocurrencies erased earlier gains immediately following the Fed chair’s statement.
The price drops happened within hours of Powell’s press conference. Traders interpreted his comments as a signal that rate cuts may not continue this year. This makes risk assets like cryptocurrencies less attractive to investors.
The decline matched broader market movements. U.S. Treasury yields moved higher and the dollar strengthened. These shifts reflected reduced expectations for monetary easing.
Bitcoin experienced increased volatility over the following 24 hours. The price fell to nearly $108,000 before recovering above $110,000. This sharp movement triggered automatic liquidations across crypto futures exchanges.
Liquidation Wave Hits Leveraged Traders
Crypto futures markets saw $817 million in liquidations over 24 hours. Roughly 165,000 traders were forced to close positions. Long traders, who bet on rising prices, took most of the losses.
Source: Coinglass
Liquidations happen when traders using borrowed funds cannot maintain required margin levels. Exchanges automatically close these positions to cover losses. The largest single liquidation was an $11 million Bitcoin long position on Bybit.
Hyperliquid led all exchanges with $282 million in liquidations. Bybit recorded $223 million and Binance saw $144 million. These numbers show how much leverage existed in the market before Powell’s remarks.
Nick Ruck from LVRG Research called the selloff a “sell-the-news” event. He said Powell’s cautious press conference triggered the decline after stating the December cut is not guaranteed. However, Ruck noted the Fed’s decision to end quantitative tightening could benefit crypto markets.
Jeff Mei from BTSE said the drop reflected cautious positioning across all markets. He pointed out that inflation remains at 3%, above the Fed’s target. Mei stated the Fed has limited room to cut rates further without clearer economic data.
Powell noted that higher tariffs are adding pressure on prices. This creates a difficult balance for the central bank. The Fed must weigh slowing growth against persistent inflation when making policy decisions.
The Fed’s balance sheet runoff program reduced the central bank’s holdings of Treasury bonds and mortgage-backed securities. Ending this program means the Fed will stop shrinking its balance sheet. This could increase liquidity in financial markets over time.
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Filed under: News - @ October 30, 2025 7:24 am