Federal Reserve lowers interest rate by 0.25%, Bitcoin maintains stability for the moment.
The Federal Reserve (Fed) made a much-anticipated move to cut interest rates by 0.25% last weekend, a decision that was largely expected by the markets. However, the real drama lies ahead in whether Fed Chairman Jerome Powell signals further easing in the stock market today.
In a challenging economic environment marked by sluggish growth signals and a sense of slowdown, the Fed expressed concern about the economic outlook, stating that 'uncertainty about the economic outlook remains elevated.' This sentiment was echoed in the Fed's dual mandate, which is to maintain stable prices and maximum employment.
Despite inflation being at 2.9%, above its sacred 2% target, the Fed decided to cut rates. This decision was met with dissent from the newly installed governor of the Fed, Stephen Miran, who called for a 0.50% cut. Miran's appointment by President Trump has been a point of contention, with Trump also attempting to install dovish loyalists at the Fed to influence the stock market today.
The rate cut was underwhelming in immediate stock market terms as the markets had already priced in the decision weeks prior to the meeting. Bitcoin, often referred to as 'digital gold,' did not show a significant response to the rate cut. Instead, it traded just north of $116,000, with a 0.2% change over the previous hours. If Bitcoin is supposed to be 'digital gold,' it is not showing it yet in the stock market today.
Meanwhile, Gold surged to a record $3,730 this week, up more than 10% in a month. This surge could be attributed to increased investor confidence in safe-haven assets during uncertain economic times in the stock market today.
The Labor Department revised job creation figures for the past year, reporting 911,000 fewer jobs than previously stated. This revision has raised concerns about the health of the labor market in the stock market today. However, Michelle Bowman and Christopher Waller, previously opposing cuts, agreed that a quarter-point was 'enough for now.'
The federal appeals court also blocked Trump's attempt to oust Governor Lisa Cook, ensuring continuity at the Fed for the time being. The real drama, therefore, also lies ahead in whether Trump continues to meddle with the Fed to influence the stock market today.
Looking forward, Polymarket predicts two more rate cuts this year. The markets will be closely watching Powell's future signals to gauge the extent of further easing in the stock market today. As the economic outlook remains uncertain, the Fed's decisions will continue to shape the financial landscape in the stock market today.
Ethereum, on the other hand, remained relatively stable during this period, trading around $4,501. The cryptocurrency market, like the broader economy, will likely continue to be influenced by global economic developments in the stock market today.
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