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Cryptocurrencies rose after the Federal Open Market Committee slashed interest rates for the first time since 2020 and hinted that more cuts were coming.
Meme coins like Neiro (NEIRO), Billy (BILLY), and Baby Doge Coin (BABYDOGE) were among the best-performing coins after the decision.
Neiro soared by over 120%, reaching a record high of $0.00084, significantly higher than this month’s low of $0.00036. Its intraday volume surged to $794 million, while its market cap rose to $354 million.
Billy, another popular small-cap meme coin, climbed by 60% to $0.043, bringing its market cap to over $32 million. Baby Doge Coin, which rose on Monday after being listed by Binance, continued the uptrend in a high-volume environment.
Other large coins also continued rising, with Bitcoin (BTC) moving to $60,500, and Ethereum (ETH) climbing to $2,300. U.S. stocks also rallied, with the Nasdaq 100, Dow Jones, and the S&P 500 indices nearing their all-time highs.
Fed slashed rates as the economy cools
In its decision, the FOMC cut interest rates by 0.50%, warning that the labor market was deteriorating faster than expected. This move aligned with the predictions of most Polymarket users, while Elizabeth Warren had called for a 0.75% cut.
Recent data showed that the unemployment rate remained above 4% in August. U.S. inflation has also eased, with the latest report showing the headline consumer price index fell to 2.5% in August, the lowest point since 2021. Economists now anticipate a series of 0.50% rate cuts in the final two meetings of the year. The FOMC statement said:
“The Committee has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance.”
The last Fed cuts triggered a strong rally in the crypto market, with Bitcoin soaring to the then all-time high of $68,000 in 2021.
The next important macro event will be on Friday when the Bank of Japan (BoJ) delivers its decision. While economists expect the BoJ to leave interest rates unchanged, there is a possibility that it will hike rates, as it did in the previous meeting.
A BoJ rate hike when the Fed is cutting could narrow the interest rate spread between the two countries and invalidate the carry trade that has been prevalent for years. The divergence between the Fed and the BoJ previously triggered a crypto Black Monday, that pushed Bitcoin to its lowest point in months.
This article first appeared at crypto.news
