Monetary Policy Adjustment and Market Reaction
The U.S. Federal Reserve has officially cut interest rates by 25 basis points, setting the new range at 3.75% to 4%. While this marks a shift in monetary policy, the market reaction has been largely muted. Analysts suggest that the move was already priced in by investors who had anticipated the cut for weeks.
This is the first cut in months, and it reflects the Fed’s ongoing struggle to balance inflation concerns with signs of economic cooling. Still, the decision wasn’t unanimous. Several members of the Federal Open Market Committee (FOMC) expressed differing views on whether further cuts are needed, especially for the December meeting.
Reasons for Market Indifference
Even before the announcement, futures markets had already priced in the 25 bps rate cut. Traders were confident that economic data—especially slowing job growth and slightly easing inflation—gave the Fed enough reason to soften its stance.
Because the rate cut was widely expected, major indices like the S&P 500 and Nasdaq saw little movement. Bond yields also held steady, reflecting investor certainty that this was a “priced-in” event rather than a surprising pivot.
UPDATE: The Fed cut rates by 25 bps to 3.75–4%, but analysts say the move was already priced in and FOMC members remain split on a December cut. pic.twitter.com/8Bx7N98DBh
— Cointelegraph (@Cointelegraph) October 30, 2025
Outlook for December: Potential for Further Cuts
The big question now is what happens in December. The Fed’s messaging remained cautious. Some FOMC members emphasized the need for more data before committing to another cut, while others warned of ongoing economic risks that could justify further easing.
This division within the Fed adds uncertainty to the market outlook. Investors and analysts alike will be closely watching key data releases over the coming weeks to gauge the likelihood of another adjustment before year-end.