As widely anticipated, the US Federal Reserve reduced its benchmark interest rate range by 25 basis points, bringing it between 3.75% and 4.0%. As was generally expected, the Fed decided to conclude on December 1 the reduction of securities held on its balance sheet, that is to say the so-called “quantitative tightening” process.
“Job creation has slowed this year and the unemployment rate increased slightly but remained low until August,” said the bank’s monetary policy statement. “Inflation has increased since the start of the year and remains somewhat elevated.”
Interestingly, there was some opposition to the rate cut, with Kansas City Fed President Jeffrey Schmid voting to maintain monetary policy. As in the last meeting, Fed Governor Stephen Miran voted to cut rates by 50 basis points.
Down in the session before the rate decision, Bitcoin the rest within minutes of the news, trading at $111,700, down 3% in the past 24 hours.
Stocks continued with modest gains during the session, with the Nasdaq leading the major averages with a 0.5% advance. The 10-year Treasury yield rose three basis points to 4.02% and the dollar strengthened.
Market participants are now focusing on Fed Chairman Jerome Powell’s press conference at 2:30 p.m. ET for any signals regarding the central bank’s thinking on the economy, inflation and interest rates. For now, traders expect another 25 basis point rate cut at the Fed’s final meeting of the year in December.
