The Federal Reserve has lowered the interest rate by 25 basis points to a target range of 3.50%–3.75%, which largely aligns with market expectations. However, the central bank has not expressed a clear stance on continuous easing.
Today's decision was not unanimous, which further underscores the uncertainty that has dominated investor confidence throughout the past week
The approach is the market's focal point, not a reduction
The FOMC committee acknowledged that employment is beginning to slow, the unemployment rate increased throughout the third quarter, and inflation has risen since the beginning of 2025
Although the policy indicates that negative risks to the labor market are increasing, it has not yet committed to starting consecutive rate cuts, thus today’s statement clearly sets the future policy path based on data
The committee reiterated that it will assess 'incoming data, changing economic outlooks, and weighing risks' before deciding to adjust policies further in the future
Crypto traders will view this stance as neutral and slightly cautious, and without a clear commitment in advance, January and March have become crucial points for interest rate policy changes
Moreover, this aligns with discussions prior to the meeting, where analysts warned that a stringent interest rate cut might be possible: cutting rates today but not providing a clear easing plan
Additionally, the omission of forward-looking language reflects that the Federal Reserve wants flexibility, especially when inflation is noted to still be 'relatively high' and there is still a lot of uncertainty regarding economic growth
The rare split vote reflects internal tensions
The voting results emphasize that the committee has divided opinions, as Stephen Miran wanted to reduce interest rates by more than 50 basis points, but Austan Goolsbee and Jeffrey Schmid wanted to maintain the policy as it is
This three-way split reflects uncertainty about the future, as labor trends are becoming weaker, inflation is not continuously decreasing, and opinions on the necessity of easing are still far from unanimity
Therefore, the division of votes into three factions is interesting, as it shows the disagreement about the economy and the amount of easing that should occur in the future, and it clearly signals to the market that this cycle is no longer tilted towards easing
Notes in the balance sheet to watch
The Federal Reserve also announced that it is ready to buy short-term U.S. government bonds when necessary to maintain liquidity in the banking system, which is considered an important detail for liquidity conditions and will help preserve stability if market volatility increases in 2026
The reduction today aligns with market expectations, but it did not come with a clear plan, and the Federal Reserve's stance remains cautious, data-driven, and not overly accommodative
Because when the approach becomes a decisive factor, the focus shifts to January. The interest rate cut is the big news today, but the future will be when the market actually responds