Odds for an October Rate Cut on Wednesday Reach 98% as Trump Puts Pressure on Powell

Crypto market traders expect the Federal Reserve to cut interest rates on Wednesday 29 October, marking the second cut this year.  As per recent data, the odds for a 25 basis points rate cut have increased ahead of tomorrow’s announcement. 

These high expectations come amid fresh political pressure from Washington. Speaking on Tuesday, President Donald Trump, remarked that Fed Chair Jerome Powell could be out soon. This direct jab at the Fed chair has raised eyebrows among analysts, who see it as an attempt to influence monetary policy ahead of the two remaining meetings this year. 

Markets Brace for a Likely October Rate Cut

The Federal Reserve faces a challenging moment as it prepares for its policy decision on Wednesday. Inflation has cooled from its pandemic highs, yet hiring remains sluggish and economic growth heavily depends on big tech investment in artificial intelligence. 

Fed Chair Jerome Powell signaled earlier this year that the central bank would begin easing policy in the second half of 2025, and the first rate cut came in September. According to prediction platform Kalshi, there’s now a 97% chance for an October rate cut after tomorrow’s Fed meeting. 

This time, a quarter-point reduction would lower the key rate from 4.1% to around 3.9%, easing borrowing costs for mortgages, auto loans, and business credit. Traders view the move as a necessary adjustment to support a labor market that has slowed sharply. Recent data showed hiring averaging just 29,000 jobs a month over the past quarter, while the unemployment rate ticked up to 4.3%.

Still, the ongoing government shutdown has disrupted the release of key data, including jobs data and inflation figures. The lack of visibility could force the Fed to rely on older trends rather than fresh evidence. Nonetheless, last week’s inflation report, which was released a week late because of the shutdown, showed that inflation remains high but isn’t accelerating and may not need higher rates to tame it. 

Trump’s Remarks Add Political Heat

Trump’s latest comments on Powell mark a return to a familiar tactic of putting public pressure on the Federal Reserve. The US President has frequently criticized Powell for failing to cut rates, arguing that higher borrowing costs hurt economic growth. Now, his rhetoric has intensified once again with his latest remarks being “Powell will be out in a few months.”

Crypto analyst Ted Pillows argues that the move is not smart play saying; “Trying to pressure the Fed before two meetings ahead? Not the best play.” Ted Pillows also eyes a 25bps tomorrow but it is fully priced in by the market. 

🇺🇸 Trump: “Powell will be out in a few months.”

Trying to pressure the Fed before two meetings ahead? Not the best play.

25bps coming tomorrow, feels fully priced in.

— Ted (@TedPillows) October 28, 2025

While the White House has not responded to Trump’s remarks, they have sparked debate over the Fed’s independence. Several economists believe that overt political interference could undermine confidence in monetary policy, especially at a time when the economy needs careful management. 

Powell, for his part, has maintained that rate decisions depend strictly on data, not politics. He made it clear that the slow labor market is a point of concern. “The labor market has actually softened pretty considerably…the downside risks to employment appear to have risen,” he said in recent remarks. 

Implications of a Rate Cut on Bitcoin and the Crypto Market

An October rate cut on Wednesday would have a ripple extending way beyond Wall Street. Reduced interest rates normally depreciate the dollar and increase the appeal of risk assets, which could benefit Bitcoin and the crypto market. 

Bitcoin is currently trading at $114,469 having declined by 0.6% over the last 24 hours as investors await the outcome determined by the Fed. On the other hand, the general crypto market cap sits at $3.95 trillion, per data by Coingecko. 

In case Powell announces further reduction in December, Bitcoin will resume its rising trend since traders will redirect funds to other types of assets. Traditionally, crypto performs well in times of economic policy easing due to increase in liquidity and a decrease in the real yield. Yet, any sign of hesitation from the Fed could trigger short-term volatility.

For now, traders see tomorrow’s decision as a near certainty. What follows, Powell’s tone, his outlook, and hints of future cuts, may determine whether the next leg for crypto is a rally or a retracement.