On December 11, the Federal Reserve announced a 25 basis point rate cut as expected at 3:00 AM Beijing time, lowering the benchmark interest rate to 3.50%-3.75%. This marks the third consecutive rate cut at the meeting, in line with market expectations, and bringing the total rate cuts this year to 75 basis points.
The Federal Reserve's dot plot projections indicate two 25-basis-point rate cuts in 2026 and 2027.
In his latest article, Nick Timiraos, known as the "Federal Reserve mouthpiece," stated that while Federal Reserve officials cut interest rates for the third consecutive meeting, there is an unusual division within the Fed regarding whether inflation or the job market should be a greater concern, leading officials to suggest a low willingness to continue cutting rates.
Furthermore, Federal Reserve Chairman Jerome Powell stated in his speech that the labor market appears to be gradually cooling, and inflation remains slightly high. Inflation risks are skewed to the upside. September labor market data showed a slight increase in the unemployment rate and a significant slowdown in job growth. Labor demand has clearly slowed, showing reduced activity and a slight weakening.
Goldman Sachs analyst Kay Haigh stated that the Federal Reserve has reached the end of its "precautionary rate cuts." She believes, "The next responsibility lies in labor market data needing to weaken further to justify additional near-term easing."
Following Powell's speech, Bitcoin briefly surged above $94,000 before falling back, closing at $91,918 at the time of writing.
