The anticipated interest rate cut comes as the Trump administration moves to oust Fed governor Lisa Cook and adds Stephen Miran to the board, raising concerns over central bank independence and crypto market impact.
The U.S. Federal Reserve is expected to cut interest rates on Wednesday, a move typically supportive of crypto markets by making risk assets more attractive. The decision coincides with political conflict over Fed governance, as President Trump’s administration seeks to remove Biden-era appointee Lisa Cook over contested mortgage fraud allegations, while the Senate has confirmed White House economic adviser Stephen Miran to the Fed board. Analysts suggest lower rates could boost liquidity into decentralized finance (DeFi) and high-beta layer-1 cryptocurrencies like Ethereum and Solana. Bitcoin, while less sensitive to rate changes, may still benefit from increased liquidity. Equity markets have historically responded positively when rates are cut near market highs.