Meme Coins Surge as Fed Implements Aggressive Rate Cut

Cryptocurrencies experienced a significant boost after the Federal Open Market Committee (FOMC) reduced interest rates for the first time since 2020, signaling potential further cuts. Meme coins such as Neiro (NEIRO), Billy (BILLY), and Baby Doge Coin (BABYDOGE) were top performers following the announcement.

Neiro Leads the Pack Neiro recorded an impressive surge, climbing over 120% to reach a new high of $0.00084, markedly above its monthly low of $0.00036. Intraday trading volume soared to $794 million, driving its market capitalization to $354 million. The rally placed Neiro as one of the most prominent meme coins in the market.

Billy and Baby Doge Coin Follow Suit Billy, another meme coin favorite, jumped 60% to $0.043, elevating its market capitalization to $32 million. Baby Doge Coin, which gained momentum earlier in the week following its listing on Binance, continued its upward trajectory, fueled by high-volume trading.

Broader Market Gains The upward trend extended beyond meme coins. Bitcoin (BTC) rose to $60,500, while Ethereum (ETH) increased to $2,300. Meanwhile, U.S. equity markets rallied, with the Nasdaq 100, Dow Jones, and S&P 500 approaching all-time highs.

Fed Rate Cut: A Macro Shift The FOMC cut interest rates by 0.50%, citing a faster-than-expected weakening labor market. The move was broadly anticipated, although Senator Elizabeth Warren had advocated for a larger 0.75% cut. The unemployment rate remained above 4% in August, while inflation softened, with the consumer price index falling to 2.5%—its lowest level since 2021.

This marked the first rate cut since 2020 and reflected the Fed’s growing confidence in achieving its 2% inflation target. Economists now predict a series of additional 0.50% cuts in the year’s final two meetings.

Global Macro Watch: BoJ Decision Looms Attention now shifts to the Bank of Japan’s (BoJ) rate decision, expected Friday. While economists anticipate no change in rates, the possibility of a hike exists. A BoJ rate hike, contrasting the Fed’s cuts, could narrow the interest rate differential between Japan and the U.S., potentially disrupting carry trade strategies that have flourished for years.

A similar divergence between the Fed and BoJ in the past led to a sharp sell-off in the cryptocurrency market, with Bitcoin plunging during the so-called “Black Monday.”

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