As widely expected, the US Federal Reserve cut its benchmark interest rate range by 25 basis points to 3.75% to 4.0%. Also as expected, the Fed moved to end the reduction of securities held on its balance sheet on December 1, ie the so-called “quantity tightening” process.
“Job gains have slowed this year, and the unemployment rate has risen but remained low through August,” Read the bank’s policy statement. “Inflation has moved from earlier in the year and remains relatively elevated.”
Notably, there was some opposition to the rate cut, with Kansas City Fed President Jeffrey Schmid voting to keep policy steady. As he did last meeting, Governor Stephen Miran voted for a 50 basis point rate cut.
Lower in the session leading the news, Bitcoin remained so in the minutes following the news, trading at $ 111,700, down 3% in the previous 24 hours.
Stocks continued modest gains in the session, the NASDAQ leading the major averages with a 0.5% advance. The 10-year Treasury yield rose three basis points to 4.02% and strengthened the dollar.
Market participants are now focusing on Fed Chair Jerome Powell’s press conference at 2:30 pm ET for any signals about the central bank’s thinking on the economy, inflation, and interest rates. For now, traders are fully expecting another 25 basis point rate cut at the Fed’s final meeting of the year. in December.
