In line with market expectations, the U.S. Federal Reserve lowered its benchmark federal funds rate by 25 basis points, bringing it to a range of 4.5% to 4.75% on Thursday. As anticipated, this rate adjustment reflects the Fed’s ongoing strategy to moderate economic conditions while monitoring inflation trends closely. Remarkably, #Bitcoin has maintained its position near a fresh all-time high, showing resilience even as the market awaited commentary from Fed Chair Jerome Powell.

Key Takeaways from the Fed's November 7th Press Conference:

1. Labor Market Not Driving Inflation: Powell reassured that the labor market is not a current source of inflationary pressure. While the Fed typically keeps a close eye on employment levels, they noted that rising prices in other sectors are driving inflation rather than wage increases.

2. Core Inflation Stays Elevated: Data on core inflation, which excludes volatile items like food and energy, remains high. This persistent elevation in core inflation indicates that despite cooling in some areas, there are still pressures in the economy that may need longer-term management.

3. Impact of Administration or Congress: Powell mentioned that actions by any administration or Congress could “have an effect that matters” on economic conditions, suggesting the potential for fiscal policy shifts to influence monetary decisions indirectly.

4. Bond Market Reflects Growth Expectations: The recent moves in the bond market, which often react to economic outlook changes, are seen as a reflection of growth expectations. The Fed’s stance suggests they view bond trends as aligned with their current economic projections.

5. Election Outcome Neutral for Policy: In an election year, the Fed emphasized that its policy decisions will not be influenced by election outcomes in the near term, reaffirming its commitment to maintaining policy independence.

6. Confidence in Lowering Inflation to 2%: Powell expressed that the Fed has "gained confidence" in its efforts to steer inflation toward a 2% target, a milestone that will be pivotal for economic stability.

Market Reactions and Economic Outlook

The Fed's move aligns with recent market expectations and comes without significant surprises. This decision demonstrates what analysts describe as a “down the middle” approach, balancing the need for stability amid rising inflation while remaining cautious as the economy heads into 2025.

Financial markets, including Bitcoin, showed little reaction to the Fed’s rate adjustment. Bitcoin’s resilience near its recent all-time high indicates continued investor confidence, even with the Fed’s cautious view on inflationary pressures. Investors will be closely watching any changes in the Fed’s approach, particularly if inflation persists or if other economic indicators show unexpected trends.

The Fed's focus on controlling core inflation signals their concern over long-term price stability as they navigate the high level of uncertainty expected into 2025. With rates now slightly lower, the Fed aims to strike a delicate balance between supporting economic growth and preventing inflation from spiraling.

As the economy moves forward, the Fed’s ability to adapt to new data and shifting fiscal conditions will be critical. The cautious tone suggests they are poised to respond flexibly if the economic landscape changes, keeping markets and consumers on alert for further adjustments in the year ahead. #MicrosoftBitcoinRejection #Trump47thPresident #fomc #BTC☀ #BullRunAhead