The Breakdown Fed Cuts as Expected, But Powell Keeps Markets Guessing
29 snips
Oct 31, 2025 Markets got the rate cut they anticipated, but Fed Chair Powell left ambiguity about future cuts. Two members dissented in the FOMC, indicating division within the committee. Powell highlighted concerns over the impact of a government shutdown on data and suggested the economy might be stronger than expected. While Bitcoin fell post-announcement, the Fed emphasized that recent cuts are more about policy correction than accommodation. Overall, uncertainty looms as markets grapple with potential future moves and evolving economic indicators.
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December Cut Is Not Certain
- Powell said a December rate cut is "far from a foregone conclusion," which shifted market odds materially.
- That comment revealed strong disagreement on the FOMC and removed certainty about the path for upcoming cuts.
FOMC Split Across The Spectrum
- The FOMC produced two dissents from opposite wings, signaling real division on policy direction.
- Dovish Governor Stephen Moran wanted a double cut while Kansas City Fed President Esther George[Jeff] voted to hold, highlighting split views.
Data Gaps Make Policy Harder
- Powell judged underlying inflation only slightly above target and the labor market in a "curious balance."
- The Fed lacks full visibility because the government shutdown has disrupted key data releases.