As widely expected, the US Federal Reserve cut its benchmark interest rate range by 25 basis points to 3.75% to 4.0%. As it was generally expected, the Fed also went to finish the reduction of the securities on the balance sheet on December 1, i.e. the so-called “quantitative tightening” process.
“Job growth has slowed this year and unemployment has risen but remained low through August,” the bank’s policy statement read. “Inflation has increased since earlier this year and remains somewhat elevated.”
Interestingly, there was some resistance to the rate cut, with Kansas City Fed President Jeffrey Schmid voting to keep policy steady. As he did last meeting, Fed Governor Stephen Miran voted for a 50 basis point rate cut.
Lower on the session ahead of the interest rate decision, bitcoin remained so in the minutes following the news, trading at $111,700, down 3% over the past 24 hours.
Stocks continued to post modest gains on the session, with the Nasdaq leading the major averages with a gain of 0.5%. The 10-year Treasury yield rose three basis points to 4.02% and the dollar strengthened.
Market participants are now focused on Fed Chairman Jerome Powell’s press conference at 2:30 PM ET to get signals about the central bank’s thinking on the economy, inflation and interest rates. For now, traders fully expect another rate cut of 25 basis points at the Fed’s last meeting in December this year.
