Fed Plans Two Rate Cuts in 2025, Global Markets React
The Federal Reserve has set its course for 2025, signaling just two rate cuts for the year.
In a recent interview, Mary Daly, president of the Federal Reserve Bank of San Francisco, expressed confidence in this approach, stating that the Fed is “very comfortable” with the decision.
Following a series of rate cuts this year, the federal funds rate now stands at 4.25%-4.5%, marking the end of aggressive reductions. Daly indicated that the Fed has now moved past the recalibration phase and is entering a more cautious period, focused on closely monitoring incoming data related to inflation and employment.
The Fed’s decision had ripple effects worldwide, particularly impacting Asian currencies. The Japanese yen fell by 0.74%, dropping to 155.94 against the dollar, its lowest level in a month. The South Korean won and Indian rupee also struggled, with the rupee dipping below 85 to the dollar for the first time.
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While the Bank of Japan maintained its benchmark rate at 0.25%, one board member, Naoki Tamura, argued for a rate hike, citing concerns about the yen’s weakness. Meanwhile, China’s central bank shifted gears, implementing a “moderately loose” policy for the first time in 14 years, a stark contrast to its usual cautious stance.
In Europe, the Fed’s actions sent ripples through stock markets, though currency movements were more subdued. The euro saw a modest 0.5% gain against the dollar, while the Swiss franc strengthened, with the dollar dropping 0.4% against it. The European Central Bank (ECB) continued its dovish approach, cutting rates for the fourth time this year in response to lower inflation forecasts. Across the Channel, the Bank of England held rates steady, but debates over future rate cuts highlighted divisions within the bank. Markets are now pricing in potential cuts of 50 basis points in 2025.
Alexander Stefanov
Reporter at CoinsPress
Alex is Editor-in-Chief of Coinspress and co-founder of Millennial Media Group, with nearly a decade of experience covering financial markets - crypto first, then everything else. It started in 2016 with Bitcoin. Like most people at the time, he didn't fully understand it - so he kept digging. Blockchain, tokenomics, the projects, the cycles. That curiosity never stopped, and eventually pulled him into traditional markets too: equities, commodities, macro. Not because he left crypto behind, but because you can't properly understand one without the other. What drives him is straightforward: he wants to know why something is happening, not just that it's happening. Most market coverage stops at the headline - price up, price down, here's a chart. Alex finds that kind of reporting actively unhelpful. If you walk away from an article without understanding the mechanism behind the move, what did you actually learn? He holds a degree in Tourism from New Bulgarian University - not the most obvious path into financial markets, but markets have a way of pulling in people who are simply too curious to stay out. He has authored over 200 in-depth analyses and more than 10,000 articles across crypto and traditional finance. He still thinks every day in markets teaches him something new. That's probably why he hasn't stopped.
