In a surprise to no one, Fed cuts rates by 25bps

Odds of a second 25bps cut in December are now at 66%, according to CME Group

article-image

Fed interest rate cut

share


This is a segment from the Forward Guidance newsletter. To read full editions, subscribe.


The FOMC today, as expected, lowered interest rates by 25 basis points. Committee members cited a commitment to “achieving maximum employment” and a 2% inflation target as reasons for the decision. 

Odds of a second 25bps cut in December are now at 66%, according to CME Group’s federal funds futures markets data.

The FOMC’s forward guidance (see what we did there) from this week’s meeting remained unchanged, indicating committee members likely are confident that interest rates will end 2024 another 25bps lower.

“In considering additional adjustments to the target range for the federal funds rate, the committee will carefully assess incoming data, the evolving outlook and the balance of risks,” today’s statement read. 

It’s the same crucial sentence we’ve seen before, which shouldn’t shock markets. And, as a result of no surprises, stocks should see at least a mild extension of their Trump-fueled rally, according to Sevens Report Research founder Tom Essaye.

“Given yesterday’s strong rally, I’d expect some digestion of the move or a mild drift higher,” Essaye said. “However, this outcome should keep expectations for a rally into year-end in place, led by cyclical sectors — industrials, financials, small caps [and] energy — with tech and defensives lagging.”

The S&P 500 was up 0.6% over today’s session in the moments after the Fed’s decision, while the tech-heavy Nasdaq Composite had gained 1.3% just after 2 pm ET.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked Advisory.jpg

Research

ACP-125 represents a strategic opportunity to enhance Avalanche's competitive position in the Layer-1 blockchain ecosystem. Based on our previous ACP-77 analysis paired with an analysis of ACP-125, Avalanche is prioritizing kick-starting growth and network effects in its ecosystem while trading off short-term value accrual.

article-image

Empire co-host Jason Yanowitz told Yahoo Finance on Wednesday that there “needs” to be a change in SEC leadership

article-image

These Congressional winners have the crypto industry to thank

article-image

The president-elect promised to support bitcoin mining in America and halt government bitcoin sales on the campaign trail

article-image

Fed funds futures markets were pricing in a 99.2% likelihood that the committee announces a 25bps cut tomorrow

article-image

COIN, MARA, RIOT and MSTR were soaring in midday trading

article-image

Polymarket’s underlying blockchain chugged along more or less smoothly, processing 2,921,668 transactions on election day