The Federal Reserve cut the benchmark interest rate by 25 basis points to 3.50%-3.75% early this morning, in line with market expectations.

Deep Tide TechFlow News, December 11th, according to Jin10 Data, the Federal Reserve has cut the benchmark interest rate by 25 basis points to 3.50%-3.75%, marking the third consecutive meeting with a rate cut, in line with market expectations. This brings the total rate reduction for the year to 75 basis points.

Overview of the Federal Reserve’s statement and Powell’s press conference highlights:

FOMC Statement:

Summary: The rate has been lowered by 25 basis points to 3.50%-3.75%, marking the third consecutive rate cut. Milan supports a 50 basis point cut, while Goolsbee and Schmidt support maintaining the current rate.

Interest Rate Outlook: The Fed will consider further adjustments to the magnitude and timing of rate changes. The median dot plot is unchanged from September, with expectations of one more rate cut in each of the next two years.

Inflation Outlook: Inflation has risen somewhat since the beginning of the year but remains at a relatively high level, consistent with previous statements. The SEP has lowered the inflation forecast for next year.

Economic Outlook: Economic activity has been expanding at a moderate pace, with high uncertainty about the outlook, consistent with previous statements. The forecast for GDP growth over the next three years has been upgraded across the board.

Labor Market: The description of the unemployment rate as “low” has been removed, indicating that downside risks to employment have increased in recent months. The unemployment rate forecast for next year remains at 4.4%.

Reserve Purchases: The Fed will begin purchasing Treasury securities on December 12th, with $40 billion in purchases over the next 30 days. The operational restrictions on the standing overnight repo operations have been removed.

Powell’s Press Conference:

Interest Rate Outlook: The Fed will wait and observe how the economy develops. Currently, rates are at the upper end of the neutral zone. No one expects a rate hike as a baseline. Long-term interest rates may rise due to expectations of accelerated economic growth.

Inflation Outlook: Inflation risks are tilted to the upside. Peak inflation could be a few percentage points above or below current levels. Current overshooting of inflation is mainly due to tariffs. If tariffs are removed, inflation will be at the low end of the 2% range. The impact of tariffs is likely to be one-off.

Economic Outlook: The Fed does not see the economy overheating. The baseline outlook for next year is steady growth, and it will wait and observe how developments unfold.

Employment Outlook: There are downside risks in the labor market. Employment growth over the past few months has been overstated by 60,000 jobs. The unemployment rate could rise by another 0.1%-0.2%.

Bond Purchase Activity: Short-term Treasury purchases are used solely for reserve management. The scale of bond purchases may remain high over the next few months and then gradually decrease.

Latest Expectations: As of press time, futures markets expect the Fed to cut rates by a total of 55 basis points next year, slightly up from previous forecasts. The probability of a 25 basis point rate cut in January is 24.4%.

Market Reaction: From the release of the Fed statement to Powell’s speech, gold and silver initially rose, then fell, and then rebounded. Silver hit a historical high, U.S. Treasury yields fell about 4 basis points, the dollar weakened overall, non-U.S. currencies strengthened, U.S. stocks moved higher, with the Dow rising over 1%. Trump criticized Powell after the meeting, saying that rate cuts could be larger.