🔸Fed Chair Jerome Powell's comments and decisions on December 10, 2025:

While implementing the market-expected rate cut, he drew a "cautious" tone about the future. The markets interpreted this as a "hawkish rate cut"; meaning "we cut rates but the easing process may slow down," signaling caution.

Here is a summary of Powell's remarks and their impact on the markets:

1. What Happened?

• Rate Decision: The Fed, in line with expectations, lowered the policy rate by 25 basis points to a range of 3.50% - 3.75%.

• No Unanimous Vote: The decision was not unanimous. There was "dissension" among committee members, with (some members preferring to keep rates steady, while one called for a larger cut). This indicates increasing uncertainty within the Fed about the future.

• Future Projection (Dot Plot): The most critical point was here. Fed members projected only one rate cut for 2026. Markets had expected more aggressive reductions, so this projection served as a "cold shower" for the market.

2. Key Messages from Powell's Remarks
Powell highlighted these key points at the press conference:

• "Not on Autopilot": Rate cuts are not guaranteed to continue. Decisions will be data-dependent at each meeting.

• Approaching Neutral Rate: "Interest rates are approaching a 'neutral' level that neither stimulates nor restrains the economy." This was interpreted as a sign that rate cuts may be nearing their end or paused.

• Inflation and Employment: He noted that inflation is still somewhat high but the labor market has cooled. The focus is no longer solely on inflation but also on maintaining employment.

3. How Will It Affect the Markets?
Powell’s "slow and cautious" message could have the following effects on markets:

#Dollar (DXY)

Strengthening Trend: The expectation that rates will fall less in 2026 supports the dollar. The dollar index may recover losses and slightly strengthen with Powell's cautious tone.

#Gold (Ounce):

Pressure / Sideways Movement: Gold benefits from rate cuts, but Powell's "future cuts are not guaranteed" message limited upward pressure on gold. Gold might see some selling against the dollar with yields or remain range-bound.

Stock Markets (US):

Mixed / Profit Taking: While rate cuts are positive, this was already priced in. The "sell the news" (sell the news) effect may lead to limited profit-taking or sideways movement in the (S&P 500, Nasdaq).

Cryptocurrencies:

Volatility: Bitcoin and others prefer increased liquidity. However, the weak projection for 2026 may cause choppy (volatile) movements rather than a rally. Short-term trend-finding will continue.

#Bitcoin #Powell #FED #SPX500 #Nasdaq #Silver