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The Federal Reserve cut its federal funds rate by 25 basis points today, lowering it to a range of 4.5–4.75%. As the day unfolded, with markets anticipating the interest rate decision, Bitcoin reached a new all-time high of $76,700.

This rate cut comes shortly after Donald Trump’s recent electoral victory, aligning with his past statements favoring lower interest rates as a means to stimulate economic growth. 

Although Trump has no direct influence over Fed decisions, the move aligns with his economic interests and campaign promises, where he frequently advocated for more aggressive rate reductions.

The rate cut follows years without any reductions, with this being only the second in four years. 

Fed Chair Jerome Powell emphasized the Fed’s data-driven approach, noting, “Recent indicators suggest that economic activity has continued to expand at a solid pace, although labor market conditions have eased somewhat and inflation remains elevated.”

The Fed pointed to a resilient labor market, where unemployment currently sits at 4.1%, with projections to remain in the low 4% range. 

The Bureau of Labor Statistics’ latest figures align with the Fed’s confidence in sustained employment levels, which Fed members consider a positive sign for labor stability.

This monetary easing comes at a time when Trump’s views on Fed policy have sparked debate.

He has suggested that the president should have a more direct influence on interest rate decisions, a stance that challenges the tradition of Fed independence. 

Trump has argued that lower rates are vital for growth, a perspective that aligns with the positive reaction in financial markets today.

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