TLDR

• Bitcoin price at $76,644.57, up 1% in 24 hours
• RWA tokens lead market gains with 11% increase
• S&P 500 and Nasdaq reach record highs after rate decision
• Powell states election results won’t affect near-term rate policy

The Federal Reserve delivered its second consecutive interest rate cut on November 7, 2024, lowering the benchmark rate by 25 basis points to a target range of 4.50%-4.75%.

The decision, made unanimously by the Federal Open Market Committee (FOMC), arrived amid steady economic expansion and evolving market conditions.

The cryptocurrency market demonstrated resilience following the announcement, with Bitcoin (BTC) maintaining its upward trajectory. The leading cryptocurrency traded at $76,644.57, recording a modest 1% increase over 24 hours. Ethereum (ETH) showed more robust momentum, rising 7.4% to reach $2,888.21.

Solana (SOL) continued its impressive run, approaching the $200 mark after a 4.6% daily gain. The total cryptocurrency market capitalization expanded by 1.3%, nearing $2.7 trillion, indicating broad market strength across digital assets.

Real-world assets (RWA) protocols emerged as standout performers, surging 11% in the 24-hour period following the rate decision. According to Artemis, this performance outpaced the broader market’s average gain of 2.3% by nearly five times.

Traditional financial markets also responded positively to the Fed’s decision. The S&P 500 advanced 0.9%, while the Nasdaq composite index jumped 1.62%, with both indices achieving record highs. Notably, these gains began materializing even before the official rate announcement.

Fed Chairman Jerome Powell provided context for the decision during the post-meeting press conference. He emphasized that while economic activity continues to expand, the outlook carries uncertainties. The labor market has shown signs of easing, though unemployment remains at historically low levels.

The Fed’s approach to inflation continues to show progress toward its 2% target, though current levels remain above desired ranges. Powell stressed that future rate decisions will depend on incoming economic data, outlook, and risk assessment regarding employment and inflation.

Markets had largely anticipated this rate cut, as indicated by the minimal immediate price reaction across various asset classes. The move follows September’s larger half-percentage-point reduction, suggesting a more measured approach to monetary policy adjustments.

Treasury yields experienced a notable decline after the announcement, contrasting with their surge the previous day. The mortgage market, however, has shown resistance to lower rates, with 30-year mortgages holding at 6.8%.

The FOMC’s updated statement reflected slight changes in their economic assessment. They now view the risks to achieving employment and inflation goals as “roughly in balance,” modifying their previous stance of having “greater confidence” in the process.

The committee’s labor market assessment noted that “conditions have generally eased,” while maintaining that the economy “has continued to expand at a solid pace.” This careful wording suggests a balanced view of current economic conditions.

Looking ahead, market participants expect the Fed to consider another quarter-point cut in December, followed by a potential pause in January to assess the impact of these policy changes. The September dot plot indicated expectations for additional cuts totaling one full percentage point in 2025.

Powell addressed the recent presidential election, stating explicitly that the election outcome would not influence near-term rate policy decisions. He maintained the Fed’s commitment to data-dependent decision-making regardless of political developments.

The Fed’s preferred inflation indicator recently showed a 2.1% 12-month rate, while core inflation, excluding food and energy, stood at 2.7%. These metrics continue to influence the central bank’s policy decisions as it aims to achieve its target without triggering economic contraction.

GDP growth remained solid at 2.8% in the third quarter, though slightly below second-quarter levels. Initial forecasts for the fourth quarter suggest continued expansion at around 2.4%, according to the Atlanta Fed’s estimates.