Core Points - The Federal Reserve decided to lower the federal funds rate target range by 25 basis points to 3.75%-4.00% during its meeting on October 28-29, marking the second rate cut in 2025 following September's decision [1] - The Fed announced it will stop monthly reductions of its balance sheet starting December 1, effectively ending the quantitative tightening process that began in 2022 [1] - UOB's macro research report indicates a possibility of another 25 basis point rate cut in December, with two additional cuts expected in 2026 [1] Summary by Sections Federal Reserve Decision - The rate cut decision was not unanimous, with a vote of 10 to 2, indicating differing opinions among Fed officials [1] - Fed Governor Miran opposed the decision, advocating for a 50 basis point cut, while Kansas City Fed President Schmid preferred to keep rates unchanged [1] Economic Context - Fed Chair Powell described the October rate cut as a "risk management measure" aimed at aligning policy closer to a neutral stance [2] - Powell acknowledged the limitations in obtaining key economic data due to the ongoing government shutdown, suggesting a cautious approach for the December decision [2] Market Expectations - Despite Powell's cautious remarks, market expectations for a December rate cut decreased from "almost certain" to 67.1%, yet UOB maintains its forecast for a 25 basis point cut [2] - UOB predicts that by the end of 2025, the upper limit of the federal funds rate target range will reach 3.75%, with two additional cuts anticipated in 2026, bringing the terminal rate to 3.25% [2] Upcoming Meetings - The next FOMC meeting is scheduled for December 9-10 [3]

Group 1 - The Federal Reserve decided to lower the federal funds rate target range by 25 basis points to 3.75%-4.00%, marking the second rate cut in 2025 following September's decision [1] - The Fed announced it will stop monthly reductions of its balance sheet starting December 1, ending the quantitative tightening process that began in 2022 [1] - UOB's macro research report indicates a possibility of another 25 basis point rate cut in December, with two additional cuts expected in 2026 [1][2] Group 2 - The rate decision was not unanimous, with a vote of 10 to 2; dissenting opinions included a call for a 50 basis point cut and a preference to maintain the current rate [1] - Fed Chair Powell described the October rate cut as a "risk management measure" aimed at aligning policy closer to a neutral stance, acknowledging data limitations due to the government shutdown [2] - Market expectations for a December rate cut decreased from "almost certain" to 67.1% following Powell's cautious remarks, although UOB maintains its forecast for a 25 basis point cut [2]

Core Viewpoint - The market widely anticipates a 25 basis point rate cut by the Federal Reserve, adjusting the policy rate to 3.75-4.00% [1] Group 1: Federal Reserve Actions - The central bank is expected to announce the end of quantitative tightening (QT) [1] - The upcoming meeting will not include a quarterly economic projections report, shifting focus to Chairman Powell's press conference [1] Group 2: Market Expectations - Current market expectations indicate a high certainty of a rate cut in October, with a nearly 100% probability for a December cut as well [1] - Cumulative rate cuts of 117 basis points are projected by 2026, exceeding the Federal Reserve's own forecast of 75 basis points [1]

Core Viewpoint - The Federal Reserve's recent interest rate cut of 25 basis points is characterized as a risk management measure aimed at preventing undue economic drag [1] Group 1: Economic Indicators - Neil Dutta, Chief Economist at Renaissance Macro, suggests that another 25 basis point cut this week would carry a similar level of risk control [1] - Dutta notes that the ongoing weakness in the labor market is expected to lead to a cooling of inflation [1] - Several large companies have announced layoffs, indicating a deteriorating employment environment for workers [1] Group 2: Inflation Analysis - Dutta's analysis of price data indicates that, excluding tariff factors, core inflation levels should be close to the Federal Reserve's target [1]

Core Points - The Federal Reserve announced a 25 basis point cut in the federal funds rate target range to 4.00% to 4.25%, marking the first rate cut since December of the previous year and the beginning of a new easing cycle amid concerns over a slowing job market [1][2] - The Fed's shift in focus from inflation control to employment support is evident, as it acknowledged a slowdown in job growth and removed previous language indicating a robust labor market [1][2] - Fed Chairman Jerome Powell described the rate cut as a "risk management measure" in response to a complex economic environment, balancing the need for easing against persistent inflation [2][3] Economic Implications - The decision to cut rates by 25 basis points rather than 50 reflects a cautious approach, aiming to transition to a neutral rate level that supports employment without exacerbating inflation [3] - The median expectation among Fed officials suggests a further 50 basis points reduction by the end of the year, indicating a preference for gradual adjustments [3] - The rate cut is expected to weaken the relative returns on dollar assets, potentially driving international capital towards emerging markets, which could alleviate local financing pressures in the short term [3][4] Challenges and Risks - The initiation of a rate cut cycle while core inflation remains at 3.1% raises concerns about the long-term value of the dollar and the implications for the global reserve currency status [4] - The easing environment may temporarily relieve debt servicing pressures for high-debt economies, but structural issues remain unresolved, posing risks if financing conditions tighten unexpectedly [4] - The Fed's balancing act between controlling inflation, supporting employment, and managing political pressures is more complex than in previous easing cycles, with a structurally higher neutral rate limiting the scope for monetary easing [5] Global Impact - For China, the Fed's rate cut presents both opportunities and challenges, as it may attract capital inflows while also increasing market volatility [5] - The interconnectedness of global economies necessitates close monitoring of U.S. monetary policy effects, emphasizing the need for policy coordination to mitigate potential risks [5]

Core Points - The Federal Reserve announced a 25 basis point cut in the federal funds rate target range to 4.00% to 4.25%, marking its first rate cut of 2025 and the first reduction in nine months since December of the previous year [1] - The Fed's policy focus has shifted from controlling inflation to boosting employment, as indicated by the removal of previous statements regarding a robust labor market [2] - Fed Chairman Jerome Powell described the rate cut as a "risk management measure" to address the complex economic environment, highlighting the dual challenge of a weakening labor market and persistent inflation [3] Summary by Sections - **Interest Rate Decision** - The Federal Reserve cut the federal funds rate target range by 25 basis points to 4.00% to 4.25% [1] - This is the first rate cut of 2025 and the first in nine months since December [1] - **Policy Shift** - The Fed has changed its focus from inflation control to employment support, as evidenced by the removal of language about a strong labor market [2] - **Economic Context** - Powell noted the Fed is facing a rare dilemma with a weakening labor market necessitating easing policies while high inflation demands a tightening stance [3] - The median expectation from the "dot plot" indicates a potential further reduction of 50 basis points by the end of the year, suggesting two more 25 basis point cuts [3] - **Market Sentiment and Risks** - The market is generally optimistic about the Fed entering a new rate-cutting cycle, but there are significant risks due to global economic slowdown, high debt levels, and geopolitical conflicts [5] - The current economic environment features a structurally higher neutral interest rate, which may limit the effectiveness of monetary easing [5] - Excessive easing could lead to doubts about the Fed's commitment to controlling inflation and may risk unanchoring inflation expectations [6]

Core Viewpoint - The Federal Reserve announced a 25 basis point interest rate cut, marking its first reduction in 2025, following three cuts in 2024, amid a backdrop of slowing economic growth and rising inflation [1][2]. Group 1: Federal Reserve's Actions - The Federal Reserve lowered the federal funds rate target range to 4.00% to 4.25% [1]. - The decision reflects concerns over a weakening labor market and rising inflation, with the Fed acknowledging the dual risks of economic conditions [2][3]. - The Fed's dot plot indicates expectations for two more rate cuts within the year, with a median forecast for the rate to be 3.6% by the end of 2025 [2]. Group 2: Economic Indicators - Economic activity in the U.S. is showing signs of slowing, with a slight increase in the unemployment rate, although it remains at historically low levels [1]. - Inflation rates are elevated and persistent, with the Fed emphasizing the need to balance between supporting employment and controlling inflation [2][3]. - The market anticipates a high probability of further rate cuts in the coming months, with an 87.7% chance of a 25 basis point cut in October [2].

Core Viewpoint - The Federal Reserve's decision to lower interest rates and Chairman Powell's cautious remarks have not significantly impacted Bitcoin's price, but analysts expect Bitcoin to continue rising for the remainder of the year due to potential further rate cuts and other supportive factors in the cryptocurrency ecosystem [1][2]. Group 1: Federal Reserve Actions - The Federal Reserve lowered the interbank overnight lending rate by 25 basis points to a range of 4.00% to 4.25%, marking the first rate cut of the year after five meetings without changes [2]. - Powell emphasized the challenges posed by rising inflation risks and declining employment, indicating a shift in the balance of risks [2]. - The decision was influenced by significant pressure from President Donald Trump regarding monetary policy [2]. Group 2: Market Reactions - Following the Fed's announcement, Bitcoin's trading price was approximately $117,000, remaining stable as investors had already priced in the rate cut [3]. - Bitcoin's price slightly declined to $116,600 after the announcement, while major stock indices like the Nasdaq and S&P 500 experienced declines [3]. - Over the past week, Bitcoin saw a 2% increase, and the inflow into Bitcoin ETFs reached its highest level since July [3]. Group 3: Future Outlook for Bitcoin - Analysts believe that factors such as increased corporate Bitcoin reserves and sustained demand for ETFs could drive Bitcoin prices higher in the coming weeks [3]. - The CEO of FRNT Financial noted that Wall Street is entering an unprecedented period of currency devaluation, which could lead investors to allocate more funds into Bitcoin as a hedge against purchasing power erosion [4].

Core Points - The Federal Reserve announced a 25 basis point reduction in the federal funds rate target range to 4.00%-4.25% [1] - The Fed highlighted a slowdown in economic activity and a slight increase in unemployment, while inflation remains relatively high [1] - Fed Chairman Jerome Powell emphasized that the current economic environment presents dual risks, with a weakening labor market and persistent inflation [2] - Powell indicated that the focus of monetary policy is shifting towards employment risks, acknowledging a significant slowdown in job growth [3] - The decision to lower rates by 25 basis points received broad support, with only one official advocating for a larger cut [4] - Powell stated that future policy decisions will be data-dependent and will not follow a predetermined path [4] - The Fed is undergoing organizational changes, including a 10% reduction in staff, returning to levels seen a decade ago [5][10] Economic Indicators - The overall Personal Consumption Expenditures (PCE) price index rose by 2.7% year-on-year in August, with core PCE increasing by 2.9% [2][7] - Commodity inflation accelerated to 1.2% over the past year, while service inflation continues to decline [2] - Job growth has significantly slowed, with hiring fatigue and difficulties for marginalized groups indicating a cooling labor market [3][7] Policy Outlook - The Fed is adopting a "risk management" approach to rate cuts, indicating that future policy will be determined in a step-by-step manner based on evolving data [8] - Powell noted that the current level of reserves is sufficient and does not believe the balance sheet has a significant impact on the economy [9] Institutional Reforms - The Fed is willing to accept constructive criticism but does not see the need for formal reviews of its operations [5] - Powell reaffirmed the importance of the Fed's independence from political influences in its decision-making process [6]

Summary of Key Points Core Viewpoint - The Federal Reserve has lowered the federal funds rate target range by 25 basis points to 4.00%-4.25%, indicating a shift in focus towards managing risks associated with the labor market and inflation dynamics [1][4]. Economic Indicators - Economic activity in the U.S. is expected to slow down in the first half of 2025, with a slight increase in the unemployment rate, although it remains at historically low levels [1]. - The overall Personal Consumption Expenditures (PCE) price index rose by 2.7% year-on-year in August, while the core PCE increased by 2.9% [2][7]. Labor Market Dynamics - Job growth has significantly slowed, with new job creation falling below the breakeven rate needed to maintain stable unemployment [3][8]. - There are signs of a cooling labor market, including weak hiring and difficulties for marginalized groups in finding jobs [3][8]. Policy Adjustments - The Fed's current policy is characterized as a "risk management decision," balancing the dual mandate of employment and inflation control [2][9]. - Future policy decisions will be made on a meeting-by-meeting basis, relying heavily on incoming data [4][9]. Financial Stability - The overall financial condition of banks and households is stable, with default rates not reaching concerning levels, although ongoing monitoring is necessary [5]. - The Fed is undergoing organizational changes, including a 10% workforce reduction, returning to staffing levels seen a decade ago [5][11]. Independence and Governance - The Fed emphasizes its decision-making process is based on data rather than political influences, maintaining its independence as a core principle [6].