Replays · FOMC · 18 Sep 2024, 19:00 UK
A half-point cut, and a reaction that waited until morning
If you had judged the Fed's first rate cut in four and a half years by its first hour, you would have called it a non-event. Bitcoin gained 1%, which is about twice a normal hour and puts the meeting 26th out of 80 in our data. By the same time the next day, Bitcoin was up 6.2% and Solana 11%.
The decision
The Fed cut its target range by half a point to 4.75–5.00%, its first reduction since the emergency cuts of March 2020. Investors had spent the previous week arguing about whether it would be a quarter-point or a half-point. By the day itself, futures leaned towards the bigger move, which helps explain why the reaction was muted: much of it was already in the price.
An hour of hesitation
- 1 19:00 UK: the 50bp cut is announced
- 2 19:30 UK: Powell's press conference begins
- 3 19:35 UK: Bitcoin's high for the evening, $61,343
The candles show a market that could not decide. The first bar jumped to $60,900 and closed only 0.45% higher. The price edged up for half an hour, then rose to $61,343 just after Powell began speaking. He described the cut as a "recalibration" rather than the start of an emergency easing cycle. That high didn't last; within five minutes Bitcoin had given back most of the gain. Two hours after the decision it was trading below its 19:00 level.
US stocks behaved in a similar way, rising on the statement and closing slightly lower on the day. The message was being read in two ways: easier policy was good news, but a large first cut could also mean the Fed was worried about the economy.
Then the morning
By the following day that worry had faded. Asian and European markets rallied, US futures followed, and crypto went with them. Bitcoin closed the 24-hour window at $63,733, 6.17% above the decision price. That is the kind of move a first-hour chart cannot capture, and it is why we show 24-hour and one-week windows next to the first hour in the Lab.
Against the July hold, the September cut doesn't look like a turning point at all. In July Bitcoin drifted as much as 3% lower in the four hours after the statement; in September it never moved more than 2% either way. The significance only showed up later, which is a useful reminder that big policy turning points don't always produce big minute-by-minute charts.
| Market | 1h | 4h | 24h | 1w | × normal hour |
|---|---|---|---|---|---|
| Bitcoin | +1.00% | +0.31% | +6.17% | +5.24% | 2.3× |
| Ethereum | +1.21% | +1.02% | +7.30% | +11.57% | 2.2× |
| Solana | +2.45% | +1.68% | +11.09% | +15.44% | 4.1× |
| XRP | +1.11% | +1.55% | +3.83% | +2.43% | 1.7× |
| Dogecoin | +0.69% | +0.54% | +4.81% | +7.67% | 1.2× |
| Chainlink | +2.50% | +2.21% | +8.83% | +17.95% | 3.7× |
| Cardano | +1.69% | +1.34% | +7.61% | +15.64% | 3.2× |
| Litecoin | +0.57% | +0.61% | +3.82% | +5.85% | 0.9× |
| S&P 500 ETF (SPY) | +0.24% | – | – | – | – |
| Nasdaq-100 ETF (QQQ) | +0.05% | – | – | – | – |
Change from the 19:00 UK decision time.
Sources: release time and figures from the Federal Reserve's statement and target range (FRED DFEDTARU). Crypto: Bitstamp 5-minute candles; SPY/QQQ: IEX. No consensus forecasts are shown because they are proprietary; comparisons are with the previous release. “× normal hour” compares the first-hour move with the median move in matched quiet hours. How we measure it.