Tomorrow, the Federal Reserve will announce its latest decision on interest rates. This meeting, called the FOMC (Federal Open Market Committee), comes at a time when the U.S. economy is slowing down, inflation is cooling, and the crypto world is waiting for long-delayed ETF approvals. Here’s what you need to know about fed rate decision.
The Fed Is Expected to Cut Rates
Most banks and analysts agree: the Fed is likely to cut interest rates by 0.25% this week.
This would be the second rate cut this year. The Fed raised rates aggressively in 2022 and 2023 to fight inflation. But now, with inflation easing and the job market showing signs of weakness, they’re beginning to reverse course.
The expected cut would bring the federal funds rate down to 3.75%–4.00%. That’s still relatively high, but it’s lower than the peak earlier this year.
Why Are They Cutting Rates?
Two main reasons:
- The Job Market Is Slowing Down:
Unemployment is slowly rising, and companies aren’t hiring as much. Big banks like JPMorgan and Morgan Stanley say the Fed wants to support the economy before the slowdown gets worse. - Inflation Is Cooling Off:
Inflation has come down to about 3%. That’s still above the Fed’s 2% goal, but it’s much lower than it was last year. This gives the Fed more room to cut rates without worrying as much about rising prices.
What Will Powell Say?
Fed Chair Jerome Powell will hold a press conference after the decision. He’s likely to say:
- The Fed is watching the economy closely.
- They’ll cut more if needed, but they’re not committing to more cuts just yet.
- Inflation has improved, but the Fed still wants to be cautious.
Expect Powell to sound careful and neutral. He doesn’t want to promise too much, especially with another Fed meeting coming in December.
QT Might End (And That’s a Big Deal)
There’s also a chance the Fed will announce the end of “quantitative tightening”, or QT. That’s the process of shrinking the Fed’s balance sheet (basically, pulling money out of the financial system by letting bonds expire).
Why stop now?
Because liquidity, the cash banks use to lend and invest, is getting tight. The Fed doesn’t want to create unnecessary stress in the financial system. If QT ends, that could add more liquidity and support for markets.
What’s Happened This Year?
Let’s zoom out. Here’s what the Fed has done in 2025 so far:
- January–July: No changes. The Fed held rates steady around 4.5%.
- September: First cut of the year (0.25%) after unemployment ticked up.
- October (this week): Most expect another 0.25% cut.
- December: A third cut is possible, depending on how the data looks.
The tone has shifted from “inflation is still too high” to “we’re watching the job market now.”
What Are Big Banks Saying?
Here’s a quick summary from major banks:
- Goldman Sachs: Expects three cuts this year (September, October, December).
- Bank of America: Predicts two cuts, worried about cutting too much.
- Morgan Stanley & Deutsche Bank: See soft inflation as reason to cut more.
- Wells Fargo: Thinks two more cuts are likely.
- JPMorgan: Says Powell will keep the door open to more easing.
Most banks agree: the Fed is easing slowly, and probably not stopping after this week.
A Divided Fed
Not everyone at the Fed agrees. In September, one member (Stephen Miran) wanted a bigger 0.50% cut. He might dissent again this week.
Others, like Vice Chair Michelle Bowman, are more cautious. They don’t want to cut too fast and risk letting inflation creep back up.
Powell’s job is to keep everyone, and the markets, calm.
How Markets Might React
Because this rate cut is expected, markets probably won’t move much unless something surprises them.
But here’s what could spark a reaction:
- If Powell sounds cautious or rules out a December cut → stocks and crypto might dip.
- If Powell confirms QT is ending soon → that could boost risk assets.
- If the Fed sounds very confident about cutting more → markets may rally.
Right now, stocks, bonds, and crypto are already rising on hopes of easier Fed policy.
What It Means for Crypto
Crypto is having a strong month, Bitcoin recently crossed $115,000, and Ethereum is above $4,000. Traders are watching the Fed closely.
Why?
Because lower interest rates usually help crypto. When yields fall, investors look for alternative places to earn returns. That often means more money flowing into assets like BTC, ETH, and altcoins.
Also: if the Fed ends QT, that adds liquidity. More liquidity = more support for risk assets.
Analysts say as long as Powell avoids any hawkish (anti-market) surprises, crypto can keep rising into November.
The Government Shutdown Is Delaying Crypto ETFs
There’s one more important story: the SEC (which regulates ETFs) hasn’t approved any of the new crypto ETFs that were expected this month.
Why?
Because of the U.S. government shutdown.
The SEC has been mostly closed since early October. That means it hasn’t had staff available to review or approve the 16 crypto ETF applications on the table, including spot ETFs for Solana, XRP, Litecoin, and Dogecoin.
These ETFs were supposed to get final decisions in October. Now everything is delayed.
What Happens When the Shutdown Ends?
Once the government reopens, the SEC is expected to move quickly. Analysts think:
- We could see mass approvals of crypto ETFs.
- The SEC may use new listing rules to fast-track the process.
- Some approvals could come within days of reopening.
This could be a huge moment for altcoins. Just like Bitcoin surged after its ETF launch in early 2024, some expect coins like SOL and XRP to benefit if their own ETFs go live.
One analyst even called it “the most important month for crypto since the BTC ETF.”
The Bottom Line
Here’s the simple takeaway:
- The Fed is likely to cut rates tomorrow.
- It may also stop QT, which would boost liquidity.
- Powell will speak carefully, but a December cut is still on the table.
- Markets (especially crypto) are positioned for a dovish Fed.
- ETF approvals are delayed but coming, as soon as Washington reopens.
For crypto investors, this is a week to pay attention. Monetary policy is shifting, and once the government shutdown ends, a flood of ETF news could hit fast.
Stay sharp, and stay patient.
As always, this isn’t financial advice, just clear insights to help you stay informed.
Trade spot and perps on Millionero, and check out more updates at blog.millionero.com.