The core content of the Federal Reserve's October decision.

1. Interest Rate: The target range for the federal funds rate was lowered by 25 basis points to 3.75%-4.00%, marking the second consecutive rate cut since 2025. The voting showed a split of 10-2, with Federal Reserve Governor Milan advocating for a 50 basis point cut, while Kansas City Fed President Schmidt preferred to keep the current rate unchanged.
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2. Balance sheet reduction: The decision to officially terminate the balance sheet reduction plan on December 1, ending a three-and-a-half-year process of balance sheet reduction. After termination, the funds from the maturity of agency mortgage-backed securities (MBS) will be used to reinvest in short-term government bonds.
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3. Policy Outlook: Federal Reserve Chairman Powell has signaled a hawkish tone, clearly stating that a rate cut in December is "far from a done deal." He emphasized the need to closely watch subsequent economic data and inflation changes, and the data gap caused by the U.S. government shutdown may become a reason to pause rate cuts.
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4. Market Impact: The expectation of interest rate cuts in December has significantly cooled, U.S. stocks surged during the session before plummeting, with the Dow Jones slightly down, the Nasdaq slightly up, and the S&P 500 index closing flat; the dollar strengthened, and international gold prices fell over $44 from their highs. #BTC