Fed pauses rates; weak dollar shapes Bitcoin and crypto outlook

The US Federal Reserve voted to leave interest rates unchanged on Wednesday, a decision that was widely anticipated by investors. The Federal Open Market Committee held the federal funds rate in a range of 3.5% to 3.75%, marking the first pause since July. The FOMC cautioned that inflation remains "somewhat elevated," and two Fed officials dissented, voting in favor of an additional 25-basis-point rate cut.

Market commentators suggested a path toward monetary easing could still emerge indirectly. After posting its worst annual performance since 2017, the US dollar has continued to weaken this week, with the Bloomberg Spot Dollar Index sliding to four-year lows. Asked about the dollar’s decline, President Donald Trump said, "The value of the dollar is great." The Kobeissi Letter called the development "a clear signal that President Trump is willing to tolerate a weaker Dollar to push rates lower and boost US exports." David Ingles, chief markets editor at Bloomberg TV APAC, said: "President Trump may effectively be cutting rates on the Fed’s behalf by letting the dollar slide." Bitcoin (BTC) and the broader cryptocurrency market have been volatile as investors debate whether future US rate cuts could revive prices after October's liquidation sent the market sharply lower.

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