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📉 Recent rate cut: • The Federal Reserve cut its benchmark interest rate by 0.25% for the third straight meeting, bringing the fed funds target to roughly 3.50–3.75% — the lowest in ~3 years.
📊 Signal on future cuts: • The Fed’s official projections only show one additional cut in 2026, and policymakers emphasized they’ll be data dependent going forward. Markets had been pricing more easing, but the Fed didn’t fully endorse that.
🤝 Internal policy divide: • Officials remain divided internally — some advocated for larger cuts, others preferred holding rates steady — indicating uncertainty about how fast to ease.
🧠 Fed commentary: • Philadelphia Fed President Anna Paulson said additional rate cuts are possible, but they could be “some way off” as the Fed watches inflation and the labor market. • Another Fed governor publicly called for much larger cuts (100+ bps) this year, showing some aggressive easing voices exist.
📈 Market reaction: • Stocks rallied as traders interpreted the rate cut and dovish tone as supportive for risk assets, though the pace of future cuts remains unclear. • Crypto markets (e.g., Bitcoin) saw slight gains post‑announcement.
What this means
Fed isn’t signaling >1% cuts imminently — at least not from the official projections, which point to only modest easing.
Market expectations for steeper cuts (e.g., >100 bps) are possible but not currently endorsed by the majority of policymakers.
The central bank’s stance is cautious: ready to adjust if inflation cools and employment softens, but not locked into a fast, big‑cut cycle.
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