The Federal Reserve lowered the benchmark interest rate by 25 basis points to 3.50%-3.75% early this morning,

Key points from the Federal Reserve's statement and Powell's press conference:

FOMC Statement:

Overview of the statement: The interest rate was lowered by 25 basis points to 3.50%-3.75%, marking the third consecutive meeting with a rate cut. Milan supported a 50 basis point cut, while Goolsbee and Schmidt supported keeping the rate unchanged.

Interest rate outlook: Further adjustments to the magnitude and timing of interest rate changes will be considered. The median in the dot plot remains consistent with September, with one expected rate cut in each of the next two years.

Inflation outlook: Inflation has risen compared to the beginning of the year and remains relatively high, consistent with previous statements. The inflation forecast for next year was lowered in the SEP.

Economic outlook: Economic activity has been expanding at a moderate pace, with high uncertainty about the outlook, consistent with previous statements. The GDP growth rate for the next three years has been revised upward across the board.

Labor market: The description of a "relatively low" unemployment rate has been removed, as the downside risks to employment have increased in recent months. The unemployment rate forecast for next year remains unchanged at 4.4%.

Bond purchases: Purchases of treasury bills will begin on December 12, with $40 billion in treasury bills to be bought over the next 30 days. Restrictions on the operation of standing overnight repo operations have been lifted.

Powell's press conference:

Interest rate outlook: We can wait and observe how the economy develops. Currently at the upper end of the neutral range. No one expects a rate hike as the baseline expectation. Long-term rates may rise due to expectations of faster economic growth.

Inflation outlook: The inflation risk is skewed to the upside. The peak inflation rate could be slightly above or below the current level by a few tenths of a percent. Current inflation overshoot is mainly due to tariffs. If tariffs are lifted, inflation rates will be at the lower end of the 2% range. The impact of tariffs is likely to be one-time.

Economic outlook: Does not believe the economy is overheating; the baseline outlook for next year is robust growth, waiting and observing the developments.

Employment outlook: There are downside risks in the labor market. Recent job growth has been overstated by 60,000 positions. The unemployment rate could rise by up to 0.1%-0.2% more.

Bond purchase situation: Short-term treasury bill purchases are solely for reserve management, and the scale of bond purchases may remain high in the coming months, gradually decreasing afterward.

Latest expectations: The futures market expects the Federal Reserve to cut rates by a cumulative 55 basis points next year, slightly increasing from before the meeting, with a 24.4% probability of a 25 basis point cut in January.