The Federal Reserve has reduced interest rates by 25 basis points, setting the federal funds target range to 3.50–3.75% as of December 10, 2025. This marks the first rate cut in two years, reflecting concerns over rising employment risks and moderating inflation. The move signals a potential shift towards easing monetary policy, which could increase liquidity and benefit risk assets such as Bitcoin. Crypto markets are reacting to the Fed's decision, with traders closely monitoring for further rate cuts and economic data to assess if this marks the beginning of a sustained easing cycle. The policy change comes after a period of restrictive measures, indicating a significant pivot in the Fed's approach to managing economic risks.