The US Federal Reserve has cut its benchmark interest rate by 25 basis points, bringing it to a range of 400–425 bps, in line with market expectations.
Crucially, the Fed’s Survey of Economic Projections indicates that FOMC members expect another 50 bps reduction by year-end, equivalent to two additional rate cuts, which is a decidedly bullish scenario for risk assets.
While a 25 bps cut was already priced in, crypto prices saw a sharp rally on the dovish SEP, with meme coins like Dogecoin, SPX6900 and Fartcoin among the top gainers. Ethereum ecosystem coins like Ether.fi, Virtuals Protocol and Optimism are also showing bullish strength.
Fed Chair Jerome Powell’s post-FOMC comments temporarily threw cold water on the market rally, indicating that the Fed remains data-dependent and is in no rush to cut rates. Moreover, the FOMC statement reveals that the central bank’s Quantitative Tightening will continue.
The Bitcoin price momentarily fell to $114,700 following the hawkish Powell speech. However, it has since bounced back above $116,000. Altcoins are breaking out from key resistance levels, indicating that a broader crypto market rally could be on the horizon.
Crypto Market Ignores Powell’s Surprisingly Hawkish FOMC Speech
The Federal Reserve did cut interest rates by 25 bps, as was largely priced in by the financial markets.
Similarly, the Fed’s Survey of Economic Projections, or dot plot, reveals that most FOMC members agree on two additional cuts this year. The CME FedWatch, which tracks the bets placed by interest rate traders, is already showing over 80% odds of another 50 bps reduction in the federal funds target rate.
However, Fed Chair Jerome Powell’s post-FOMC speech was surprisingly hawkish, or at least not as dovish as many had expected.
Powell acknowledged the downside risk in the US jobs market, highlighting the “very, very low” hiring rate, moderated growth in economic activity and the sluggish job-creation rate.
However, in a hawkish turn, the Fed Chair revealed that the central bank isn’t in any rush to cut interest rates and will remain data-dependent. He called today’s move a “risk-management cut”, a decidedly hawkish statement.
Powell even contradicted today’s SEP projections by saying the rate path markets are pricing in is not guaranteed. Moreover, the Fed isn’t ending its quantitative tightening just yet, which means that the broader monetary conditions will remain restrictive.
However, with three rate cuts now guaranteed, the crypto market is largely ignoring Powell’s hawkish stance.
Crypto Prices Rally, Meme Coins Among The Top Gainers
Crypto markets are now pricing in two additional rate cuts this year. Bitcoin has reclaimed the $116,000 level, while altcoins have broken out of key resistances: Ethereum at $4,500, XRP at $3, and Solana at $240.
Meme coins are crowding the list of top performers. The SPX6900 price is up by nearly 9% over the past 24 hours, while Bonk and Fartcoin are up by 5% respectively.
The Doogecoin price is up by nearly 3% and is on the cusp of breaking out from the $0.28 resistance.
Ethereum ecosystem coins are displaying bullish strength as well. Ether.fi, Lido DAO, Virtuals Protocol, Optimism, and Arbitrum are in the green and on the verge of explosive upswings.
Bulls are hoping Bitcoin can clear the $118,000 resistance and Ethereum the $4,750 mark, a move that could ignite a broader crypto market rally.
Best Cryptos To Buy Now After FOMC
The crypto market is on the cusp of a major bull run. XRP has already broken out of the $3 resistance and Solana $240, making them two of the best large-cap altcoins to buy now.
If Dogecoin flips the $0.28 resistance, it could truly be on its way to a new all-time high, or at least a new yearly high of $0.50.
Meme coins are back to being the crypto market leaders. Considering their price action, SPX6900, Fartcoin, and Pudgy Penguins are among the best meme coins to buy now. If Ethereum returns to its bullish ways, Pepe and Floki could also deliver outsized returns.
Investors should also make a sizable allocation into low-cap gems like Bitcoin Hyper.
Experts suggest that retail investors should follow the flow of whale capital, and HYPER is attracting plenty of it.
The Bitcoin Hyper presale has already raised over $16.5 million in its ICO, thanks to strong whale and retail demand.
As the latest BTC layer-2 coin, experts are viewing it as a high beta play on Bitcoin. Moreover, with its use of Solana Virtual Machine and zero-knowledge architecture, it could become the hotbed of payment protocols, DeFi apps and even meme coins that are looking to tap into the Bitcoin ecosystem.
Unsurprisingly, many are viewing HYPER as the best low-cap crypto investment, with early buyers eyeing up to 100x returns.
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