The U.S. Fed continues its path of cuts amidst high inflation and a slowing economy: What does this mean for the markets?
📝 First: Main decision
Interest rate cut of 25 basis points to a range of 3.50% – 3.75%.
This cut is the third consecutive one since September 2025 after a full year of holding rates steady.
🏦 Monetary policy and market operations
Start of Treasury bond purchases on December 12 as part of the Fed's balance sheet restructuring.
A step that is a clear signal towards a gradual easing of monetary policy and supporting liquidity.
📉 Inflation and price stability
Inflation has risen compared to the beginning of this year.
Still above the target of 2%, placing the Fed in a delicate equation between:
Interest rate cut to stimulate the economy
And combating high inflation
👷 Labor market
Emergence of increasing negative risks in the labor market.
Slowdown in job growth and rising unemployment claims.
The unemployment rate recorded 4.4% in September 2025 despite adding 119,000 jobs.
💼 Economic activity
The U.S. economy is expanding but at a moderate pace.
Data indicates a mixture of:
Slowdown in employment
Continued relatively balanced economic expansion
📊 Level of Uncertainty
The Fed confirms that economic uncertainty remains high.
Members are sharply divided on the path of interest rates in 2026 and beyond.
This reflects ambiguity in inflation and economic growth forecasts.
📈 Next interest rate path
Despite consecutive cuts, the Fed's statement indicates that future reductions are not guaranteed.
The decision will depend entirely on:
Inflation data
Strength of the labor market
Macroeconomic developments
💬 Potential impacts on cryptocurrency markets
Divergence in interest rate expectations may increase financial market volatility.
Bond purchases reflect a gradual shift towards easing, which may support high-risk assets like Bitcoin and digital currencies.
The positive impact will remain conditional on continued inflation decline in the coming months.
📝 Summary
Summary of Fed Meeting:
The Fed's steps indicate a gradual transition to a more accommodative policy despite inflation remaining above target, reflecting growing concerns about economic slowdown and the labor market. Continued bond purchases affirm the Fed's desire to support liquidity and prevent further financial tightening. Despite the third interest rate cut, the path for rates in 2026 remains unclear due to conflicting economic data. This mix of cautious easing and uncertainty may open the door to wider fluctuations in the markets. The crypto sector may benefit from the easing bias, but success depends on the direction of inflation in the coming months.
