Dgenz Crypto Weekly 059

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Fed Cut Rates.. But Nobody Can Agree On What Comes Next

A rare moment in crypto today when the charts actually moved because of real economic policy and not because some billionaire tweeted a dog.

As expected, the Federal Reserve cut interest rates by 25 bps, bringing them down to 3.5%–3.75%, the lowest since 2022. But here’s the spicy part…

It was the most divided FOMC vote since 2019.

1 member wanted a bigger cut, 2 wanted no cut at all and Powell is stuck in the middle like the kid whose divorced parents keep fighting.

Why the chaos? Because the Fed is trapped between two bosses:

• Inflation (still hotter than Powell wants)

• Unemployment (creeping up thanks to slower hiring + tariff shocks)

And the Fed only has one tool to fix both… which is like trying to fix your entire apartment with one IKEA allen key.

So, yes — we got the cut.
But no — it doesn’t mean more cuts are guaranteed.

In fact, the Fed now thinks 2026 gets only ONE more cut… but the dot plot looks like someone dropped a bowl of Skittles on the chart.

Translation:
Nobody at the Fed has any idea where rates are going.

Rate Cuts = Cheaper Money = Happier Degens

Here’s the TL;DR in actual human English:

Lower Rates → Cheaper Loans → More Spending → More Liquidity → Risk Assets Pump

But here’s what makes this cut extra weird: The Fed made the decision with NO DATA

Because of the government shutdown, they didn’t have:

• updated inflation numbers

• updated unemployment data

• updated labor market strength

This means the Fed cut blindfolded, guessing based on old data and vibes.

And markets LOVE vibes.

But before anyone starts screaming “WE ARE SO BACK”

Here are the real odds from the CME FedWatch tool:

Only a 20% chance of another cut in January, meaning 80% chance Powell says “not today, degens”. So this cut might be the last slice of rate-cut cake you get for a while.

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So What Happens Next?

This is where it gets fun. The Dot Plot = Full Chaos Mode

The dot plot shows 2026 rate expectations from all 19 policymakers.

• Some expect rate hikes

• Some expect tiny cuts

• Some expect BIG cuts (1.5%)

• And Powell is just trying not to cry on TV

This level of disagreement = elevated volatility for markets.

Because when the Fed doesn’t know what it’s doing…
Markets don’t know what they’re doing…
Which means crypto absolutely doesn’t know what it's doing.

Here’s the simplest breakdown possible:

Bullish Indicators

• The Fed cut even without solid data → leaning toward supporting jobs

• GDP forecasts improved

• Inflation forecasts cooled

• The Fed thinks they’re now in “neutral” territory

• Markets LOVE when the Fed is “maybe probably kinda” done tightening

• Liquidity tends to flow back into risk assets shortly after pauses/cuts

Bearish Indicators

• The dot plot shows more hawks than before

• 5–7 Fed members think rates should stay higher for longer

• Powell said inflation is still too high

• January’s cut odds look weak

• A ton of inflation pressure is still coming from Trump’s new tariffs

The one line that broke markets was Powell saying:
“The risks are to the upside for unemployment and inflation.”

Translation for traders: If either number gets worse then no cuts for a while.

What This Means for Degens Like Us

Here’s your cheat sheet for the next few weeks:

• Don’t assume cuts continue. This might’ve been the final rate-cut boss battle.

• Expect volatility. Markets are confused → crypto becomes a pinball machine.

• Liquidity trends still matter. A cut is still a cut — good long-term for BTC & majors.

• January’s meeting is now the real decider.

If the labor data next week comes in weak → 50/50 chance we get another cut.

If inflation is hotter than Powell’s forehead during a press conference then there’s
no cut, markets dump, and bears celebrate.

But until then…

We’re in that awkward middle zone where the macro is turning.

We might be back… but ask again in 6 weeks.

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