The Federal Reserve on Wednesday delivered a widely anticipated 25 basis point rate cut, lowering the federal funds target range to 3.50%–3.75%. It marks the third consecutive quarter-point reduction and brings borrowing costs to their lowest level in more than two years. The decision comes as policymakers continue to operate without several major economic indicators, which remain delayed or halted due to the ongoing U.S. government shutdown.
In its statement, the Fed noted that “uncertainty about the economic outlook remains elevated,” adding that downside risks to employment have increased. The central bank also flagged declining reserve balances and said it is prepared to purchase shorter-term Treasury securities as needed to maintain ample liquidity in the financial system.
Market reaction was mixed. Bitcoin swung sharply before stabilizing near $92,400, while U.S. equities posted modest gains. The 10-year Treasury yield slipped two basis points to 4.15%.
The decision was notable for its visible internal rift. Multiple Fed officials had publicly opposed additional easing in recent weeks, and two—Kansas City Fed President Jeffrey Schmid and Chicago Fed President Austan Goolsbee—voted to keep rates unchanged. Fed Governor Stephen Miran, a recent appointee, dissented in the other direction, calling for a larger 50 basis point cut.
Updated Projections
The meeting included revised economic forecasts. Core inflation is now expected to reach 3% in 2025 and 2.5% in 2026, both slightly lower than previous estimates. GDP growth was revised upward to 1.7% next year and 2.3% in 2026, compared with earlier projections of 1.6% and 1.8%.
The Fed’s latest dot plot showed little movement, with policymakers still projecting just one rate cut in 2026—well below market expectations for two reductions next year.
The policy announcement lands at a time of incomplete economic data due to the shutdown and renewed political scrutiny of the central bank. President Trump has continued to criticize Chair Jerome Powell while considering potential replacements when Powell’s term ends in 2026.
Attention now shifts to Powell’s press conference at 2:30 p.m. ET, where investors hope to obtain clearer signals about the path of policy. Ahead of the event, CME FedWatch shows markets pricing in a 24% probability of another rate cut in January.

More Stories
Michael Burry sounds ‘death spiral’ alarm after silver liquidations surpass bitcoin
Bitcoin stages violent reversal after 14-month low, sparking $740 million in liquidations
Cryptocurrencies stabilize as shutdown comes to a close