Definition ∞ A Federal Reserve rate cut is a decision by the United States central bank to lower its benchmark interest rate. This action typically aims to stimulate economic activity by making borrowing cheaper. It influences the cost of capital across financial markets, including those for digital assets. Such policy changes can affect investor sentiment and capital flows.
Context ∞ Federal Reserve rate cuts are a significant economic news item, with substantial implications for traditional and digital asset markets. Current discussions frequently focus on the timing and magnitude of potential rate adjustments in response to inflation or economic growth data. These decisions often correlate with shifts in investor preference for riskier assets like cryptocurrencies.
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