How Fed Rate Cuts Could Influence XRP’s Next Move: The December 2025 Outlook After the 2026 Hike

Update 25 September 2026: The rate cuts this article expected for early 2026 did not come. The Fed held its target range at 3.50 to 3.75% from December 2025 for nine months and then raised it by 25 basis points to 3.75 to 4.00% at its September 2026 meeting. XRP briefly touched $2.42 in January 2026 but fell below $1 in August and trades at around $1.54 on 25 September 2026. The original analysis from 19 December 2025 follows below as a dated snapshot.

If you want to buy XRP today, our crypto exchange comparison shows where.

What happened to the Fed and XRP after December 2025?

According to the Federal Reserve's own record of rate decisions, the last cut of this cycle came on 10 December 2025, when the target range was lowered to 3.50 to 3.75%. After that the Fed paused for more than nine months. At its meeting on 15 and 16 September 2026 it reversed course and raised the range to 3.75 to 4.00%, effective 17 September. Futures markets are now pricing a further hike at the next meeting in October; our analysis of the Fed rate hike risk in October explains what that means for leveraged crypto positions.

XRP took an unusual path through this period. On Binance, the XRP/USDT pair rose to $2.42 in January 2026, at the top of the $2.20 to $2.40 target zone this article had named for February, but the rally did not hold. XRP closed January at $1.65, fell as low as $1.12 in February and reached its low for the year at $0.99 in August 2026. It has since recovered to around $1.54. Our current outlook is on the XRP price prediction page.

XRP price in December 2025: under pressure below $2

When this article was published, XRP price was trading under pressure, hovering near $1.82 after another rejection at the $2.00 mark. While the broader crypto market was showing signs of stabilization, XRP had been stuck in a prolonged downtrend. The macro backdrop looked like it could shift the momentum: cooling US inflation had revived expectations of Federal Reserve rate cuts, which could reshape liquidity conditions across global markets. For XRP price, that could have meant a turning point, but the charts suggested it was not there yet.

XRP price prediction: inflation eases, rate cut hopes rise

The US consumer price report of the Bureau of Labor Statistics showed core inflation falling to a four-year low in November 2025. Historically, falling inflation opens the door for the Fed to lower borrowing costs, a move that tends to support risk assets such as cryptocurrencies. If the Fed had continued cutting in early 2026, capital could have flowed back into speculative markets as investors looked for higher returns.

Still, the picture was not straightforward. The government shutdown in October and November 2025 had distorted the economic data and left Fed officials cautious. At the time, futures markets priced only about a one-in-four chance of a rate cut in January, while dovish expectations were building for the first quarter of 2026. That macro optimism looked like the spark XRP price needed, but timing remained key.

XRP price prediction in December 2025: XRP under pressure

On the daily chart, XRP price was trading below the 20-day moving average and sliding within a descending channel. The Bollinger Bands showed widening volatility, with the price hugging the lower band near $1.82, a zone often associated with oversold conditions. That level coincided with a support cluster between $1.78 and $1.70 that had held since early December.

If XRP price reclaimed the $2.00 resistance, a short-term recovery towards $2.22, the upper Bollinger Band, looked likely. Repeated failures near that zone, however, showed that sellers were still in control. A daily close below $1.75 would open the door to deeper losses towards $1.50, a level not seen since mid-2023. The overall structure remained bearish until a decisive close above the 20-day SMA confirmed a reversal.

Liquidity flows and market psychology

Crypto sentiment often shifts before policy does. Traders tend to position ahead of official rate cuts, especially when inflation data signals relief. Another quarter-point cut in early 2026 could have revived risk appetite across digital assets: lower yields push investors towards higher-beta assets like XRP, particularly when broader altcoin indices recover.

XRP's price history, however, shows a lagging response to macro shifts compared with Bitcoin and Ethereum. XRP could therefore underperform early in a recovery cycle and catch up only once investor confidence spreads beyond the largest coins. Current outlooks for both are on our Bitcoin price prediction and Ethereum price prediction pages.

Short-term outlook in December 2025: consolidation before direction

For the following days we expected XRP price to oscillate between $1.75 and $1.95 while traders waited for clearer signals from the Fed. The next inflation report and FOMC commentary were likely to decide the direction of the next breakout. A confirmed rate cut would weaken the dollar and strengthen the macro case for crypto, but for XRP, bulls first had to defend support to avoid another slide.

In short, XRP's immediate fate sat at the intersection of policy and psychology. A dovish Fed could be the catalyst, but the charts called for caution: unless $2.00 was reclaimed with volume, the trend remained tilted downward.

XRP price prediction: recovery possible, but confirmation needed

If the Fed's tone kept softening and rate cuts followed in the first quarter of 2026, we saw XRP price rebounding towards $2.20 to $2.40 by February. Sustained buying volume above $2.00 would validate that breakout. If macro uncertainty persisted or Bitcoin weakened, XRP could instead revisit the $1.50 to $1.60 range before any recovery.

How did the December 2025 outlook hold up?

Both scenarios played out, in the wrong order for bulls and without the trigger we expected. XRP reached $2.42 in January 2026 without a rate cut, then broke below the $1.50 to $1.60 range in February and kept falling until August. The macro lifeline this article described never arrived: instead of cutting in the first quarter, the Fed held rates for nine months and then raised them. The lesson is that a rate cut priced in by the market is not a rate cut, and an altcoin that depends on that expectation is exposed when it fades.

FAQ

Did the Fed cut rates in 2026?

No. The last cut came on 10 December 2025. In 2026 the Fed held its target range at 3.50 to 3.75% until September and raised it to 3.75 to 4.00% at its September meeting.

How do Fed rate decisions affect XRP?

Lower rates tend to push investors towards riskier assets such as XRP, while rate hikes and higher yields tend to weigh on them. XRP has historically reacted to macro shifts later than Bitcoin and Ethereum.

What was the XRP price in 2026?

On Binance, XRP traded as high as $2.42 in January 2026 and as low as $0.99 in August 2026. On 25 September 2026 it traded at around $1.54.