The Federal Reserve lowered its benchmark interest rates by 25 basis points, now placing them in a target range between 3.50% and 3.75%. A decision anticipated by the markets, but it does not bring any real momentum towards new easing.
Today's decision was not unanimous, reinforcing the uncertainty that influenced investor sentiment last week.
Forecasts guide the market, not the decline
The FOMC acknowledged a 'moderation in job creation,' a rise in unemployment until the third quarter, as well as inflation that 'has increased' since the beginning of 2025.
If committee members recognize that the risks facing the job market are increasing, they nonetheless avoid committing to a series of rate cuts. Their statement today relies on a 'data-dependent' approach.
The committee reaffirms that it will review 'new data, evolving outlooks, and risk balances' before considering further adjustments.
On the crypto side, traders will see a neutral, if slightly cautious, stance. In the absence of a clear commitment to the future, January and March become the next key deadlines to anticipate the trajectory of rates.
A positioning that aligns with pre-meeting discussions, during which analysts feared a 'restrictive rate cut': a loosening today, without an accommodative roadmap for the future.
The absence of a proactive message suggests that the Fed wants to maintain flexibility, especially since inflation remains 'rather high' and uncertainty persists regarding growth.
A rare split vote highlights internal tension
The breakdown of the votes shows a divided committee. Stephen Miran advocated for a more pronounced cut of 50 basis points, while Austan Goolsbee and Jeffrey Schmid preferred to keep monetary policy unchanged.
Such a three-way split reflects the prevailing uncertainty. The labor market's slowdown is confirmed, inflation is no longer declining uniformly, and the debate over the extent of the need for easing is intensifying.
This division is striking. It reflects divergences on the economic maneuvering room: should we accelerate the easing or, on the contrary, pause? Markets see a clear signal that 'the cycle is no longer clearly accommodative.'
balance sheet note to report
The Fed has also indicated its willingness to buy short-term Treasury securities if necessary to maintain an adequate level of bank reserves – a discreet but important signal for liquidity. These purchases could play a stabilizing role if volatility were to increase by 2026.
The announcement thus comes as expected for the markets, but without a real user manual. The tone is measured, cautious, and driven by data rather than a bias towards easing.
The next steps now depend on the indications the Fed will provide in early January. The rate cut was expected; the bulk of the reaction is still to come.$\u003cc-47/\u003e
