Bitcoin Slides as Powell Pushes Back on December Rate Cut Expectations

Bitcoin extended losses late Wednesday after Federal Reserve Chair Jerome Powell struck a surprisingly hawkish tone during his post-meeting press conference, warning that another rate cut in December was “far from a foregone conclusion.”

The comment rattled markets that had largely priced in a 90% probability of another 25-basis-point cut at the Fed’s final meeting of the year, according to CME FedWatch data.

Bitcoin (BTC) quickly dropped nearly $2,000 following Powell’s remarks, falling to around $109,600 — down roughly 5% over the past 24 hours and erasing much of the week’s earlier rally.

Equities also reversed course, with major stock indexes turning lower after an initial gain. The 10-year Treasury yield climbed eight basis points to 4.06%, while the U.S. dollar strengthened sharply as traders trimmed bets on near-term monetary easing. Market-implied odds for a December rate cut fell to 69% from 90% earlier in the day.

Earlier, the Fed had cut its benchmark rate by 25 basis points, setting the new target range between 3.75% and 4.00%. Despite the move, the decision was viewed as a “hawkish cut”, with Kansas City Fed President Jeffrey Schmid dissenting in favor of holding rates steady — signaling that the path ahead for monetary policy remains uncertain.

Powell acknowledged signs of labor market cooling but maintained that inflation risks still justify caution. “Job gains have slowed, but inflation remains somewhat elevated,” he said.

Marcin Kazmierczak, co-founder of RedStone, said the ongoing government shutdown and resulting “data blackout” could complicate the Fed’s ability to guide markets in the coming months.

“The lack of updated economic data means subsequent Fed decisions are now unpredictable — and that’s what markets hate most,” Kazmierczak noted. “This uncertainty will likely drive volatility in bitcoin and broader crypto markets through year-end.”

Paul Howard, director at trading firm Wincent, said bitcoin remains within its medium-term range between $110,000 and $120,000, but Powell’s comments have added short-term downside pressure.

“This dip could be setting up for accumulation,” Howard said. “I expect improving macro conditions heading into November to support risk assets before some end-of-year consolidation.”