Fed Announces 25bps Rate Cut While Powell Highlights Uncertainty over FOMC Move of December

The U.S. Federal Reserve has recently announced the latest rate cut decision. As expected, the 25bps interest rate cut denotes the 2nd consecutive cut within the year 2025. As per the data from Nick Timiraos, Chief Economics Correspondent at the Wall Street Journal, the new Fed rate cut decision is crucial following the October Federal Open Market Committee (FOMC) meeting for the crypto market. Specifically, the meeting witnessed 10-2 votes, significantly backing the decision of rate cuts.

https://twitter.com/NickTimiraos/status/1983594734485410078?ref_src=twsrc%5Etfw” target=”_blank” rel=”noopener nofollow

Fed Cuts Interest Rates by 25bps After October FOMC Meeting

The latest reports point out that the U.S. Fed has cut the interest rates by 25bps. The respective decision after the October FOMC meeting indicates a key moment for the Fed’s recalibration of its current monetary policy and crypto as well. Nonetheless, with 2 FOMC members dissenting from the decision, it didn’t remain unanimous.

In this respect, Miran reportedly pushed for a comprehensive 50bps rate cut. Apart from the rate modification, the Fed clarified that it will conclude the quantitative tightening (QT) on the 1st of December. The respective move redirects MBS retrievals into Treasury bills.

Powell Says Inflation Remains above Target While Fed Concludes QT by December 1

The overall statement also highlights a shift in linguistics, using “available” data rather than “recent” data. This signals a nuanced change in the Fed’s data-led approach in the statement. In addition to this, the Fed Chairman, Jerome Powell, said that, amid the moderation of inflation from the peak, it is still above the 2% target of the central bank. This warrants a gradual and careful policy adjustment.

According to Nick Timiraos, apart from cutting rates by 25bps, the Fed has also confirmed December 1 as the final date for the end of quantitative tightening (QT). This move is anticipated to inject more liquidity into the broader financial system. Moreover, the decision for the reinvestment of MBS redemptions into T-bills displays an endeavor to maintain sheet-flexibility balance and stability in provisional funding markets.