Bitcoin has become a consensus after being suppressed by various countries. Trump still supports virtual currency when he took office. This decline was caused by Powell's temporary mood, which is not a big trend.


[Jinshi Data Compilation: Highlights of the Federal Reserve FOMC Statement and Powell’s Press Conference]

FOMC statement:

1. Statement Overview: The wording remained largely unchanged, with a vote of 11-1 to approve a 25 basis point rate cut, with Hammark supporting a pause in rate cuts. ON-RRP was lowered by 30 basis points.

2. Interest rate outlook: The “magnitude and timing” of further rate cuts will be considered. The median of the dot plot was raised, indicating that interest rates will be cut twice each in the next two years, but some officials have serious differences.

3. Inflation Outlook: Delaying the timeline to achieve the 2% inflation target to 2027, with upward adjustments to expectations for 2024-2026, and most officials anticipate upward risks.

4. Economic Outlook: Slightly lowered unemployment rate expectations. The wording on steady economic growth remains unchanged, with the real GDP growth rate expectations for this year and next year raised significantly from 2% to 2.5%.

Powell's Press Conference:

1. Interest Rate Outlook: Consider adjustments to interest rates more cautiously; changes in wording indicate that we are at or near a slowdown in rate cuts, and raising rates seems unlikely next year. If inflation cannot consistently move towards 2%, rate cuts may be slower. Slow rate cuts could impact the economy and employment.

2. Inflation Outlook: It may take another year or two to reach the target; risks and uncertainties are relatively high; discussions are ongoing about how tariffs could drive inflation.

3. Economic Outlook: Overall economic performance is strong, with economic growth in the second half exceeding expectations, and there is no reason to believe that the likelihood of an economic downturn is higher than usual.

4. Employment Outlook: The labor market remains robust and is not a significant source of inflationary pressure, not cooling to a concerning degree, and will continue to be monitored.

5. Other Statements: (Regarding Bitcoin reserve policy) The Federal Reserve does not allow and has no intention to hold Bitcoin. Today's interest rate decision was a relatively difficult choice.

6. Market Reaction: From the announcement of the statement to Powell's speech, spot gold fell sharply by $56; the dollar index has increased by 110 points since the announcement, reaching a two-year high; 2Y U.S. Treasury yields rose by 15 basis points; the Nasdaq decline expanded to 3%; Bitcoin fell more than $5,000.

7. Latest Expectations: Traders continue to reduce pricing for Fed rate cuts, expecting only a 37 basis point cut in 2025, significantly lower than the 75 basis points before the meeting.