The FOMC delivered a Fed rate cut of 25 basis points to 3.50–3.75%, marking the third straight easing move. Three dissenters highlighted divisions, as the statement added language on considering the extent and timing of further adjustments and dropped the low unemployment reference, signaling a policy rethink.

Chair Powell framed policy near the neutral range, stressing no hikes for now. He cited inflation risks—largely tariff-driven—and warned a tariff reversal could push inflation toward 2%. Labor data may be overstated.

Markets price roughly 55bps of easing next year, with January cuts unlikely. Divergent outlooks on timing—from March to a H1 pause—shape liquidity expectations and risk sentiment.

Crypto markets reacted to the policy backdrop with a cautious risk-on tilt, aided by improving liquidity. Digital assets may benefit as the path remains data-driven and liquidity-focused, pending clearer signals from labor and inflation data.