As expected, the U.S. Federal Reserve has reduced its benchmark interest rate range by 25 basis points, setting it at 3.75% to 4.0%. Also anticipated, the Fed is set to finalize the reduction of securities on its balance sheet by December 1, thus concluding the “quantitative tightening” phase.
“Job growth has slowed this year, and while the unemployment rate has slightly increased, it has remained low through August,” according to the bank’s policy statement. “Inflation has risen since earlier this year and is still somewhat elevated.”
Notably, there was some dissent regarding the rate cut, with Kansas City Fed President Jeffrey Schmid voting to maintain the current policy. Similarly, Fed Governor Stephen Miran also advocated for a 50 basis point rate cut, as he did in the last meeting.
In the minutes following the news, bitcoin was trading at $111,700, showing a 3% decrease over the last 24 hours.
Stocks exhibited modest gains during the session, with the Nasdaq outperforming the major averages with a 0.5% increase. The yield on the 10-year Treasury rose by three basis points to 4.02%, and the dollar strengthened.
Market participants are now looking forward to Fed Chair Jerome Powell’s press conference at 2:30 p.m. ET for any insights into the central bank’s views on the economy, inflation, and interest rates. Currently, traders anticipate another 25 basis point rate cut at the Fed’s concluding meeting of the year in December.
