Bitcoin’s price fell to $109,000 on Wednesday afternoon after Federal Reserve Chairman Jerome Powell signaled that further rate cuts may not follow in December. Since then, the Bitcoin price has leveled close to $111,000.
The drop came shortly after the central bank cut its benchmark interest rate by 0.25 percentage points to a target range of 3.75%-4%.
The cut – the Fed’s second of 2025 after a move in September – ended a long stretch of holding rates. The policy change aims to lower borrowing costs and support economic activity. But Powell’s comments that further cuts are not guaranteed this year sparked selling across risk assets.
Prior to the announcement, Bitcoin was trading near $116,000 on Monday and briefly dipped below $111,000 early Tuesday. The price jumped briefly on the news before falling again as Powell spoke. Bitcoin is currently trading near $111,200, according to Bitcoin Magazine Pro data.
During the press conference, when Jerome Powell said that December’s interest rate cuts are not guaranteed, Bitcoin’s price reacted immediately – plunging to $109,000 in a sharp red before quickly recovering. The broader crypto market reacted similarly.
Powell said inflation excluding the impact of tariffs is “not that far” from the central bank’s 2% target, but stressed that policymakers “have not made a decision about December.” Powell noted that officials had “strongly divergent views” during today’s meeting.
Following his remarks, markets sharply reduced expectations for another rate cut this year. Fed funds futures are now pricing in a 71% chance of a December cut, down from about 90% earlier in the day, according to CME data and on prediction markets such as Kalshi and Polymarket.
The two-year Treasury yield rose 9 basis points as traders reassessed the Fed’s short-term path.
Historically, Bitcoin has reacted sharply to monetary policy changes. After the Fed’s emergency cuts in March 2020, Bitcoin fell almost 39% before recovering. When the Fed cut in September 2025, the market reaction was limited – suggesting that expectations were already priced in.
Bitcoin price as Fed signals end of quantitative easing
Powell also said the central bank is nearing the end of its quantitative easing program, confirming that the Fed expects to end QT before December. This involves letting some holdings of government bonds and mortgage bonds run off the balance sheet as they mature, rather than reinvesting the principal.
QT reduces liquidity by shrinking the Fed’s balance sheet by allowing Treasuries to expire without reinvestment or by selling them to the market.
The process has been ongoing since 2022 and has removed nearly $1 trillion in securities as part of efforts to fight inflation.
Ending QT would stop this drain on liquidity — a shift many analysts believe could ultimately support flows into risk assets, including Bitcoin.
However, Powell warned that policy will remain dependent on economic data, adding further uncertainty to market expectations.