What happened?
The Federal Reserve cut rates by 25 basis points to 3.75–4% but Chair Powell sounded cautious and warned a government data blackout could cloud future decisions. Markets didn’t rally on the cut — bitcoin slid below $110,000 and Asian equities opened mixed while US futures faded. Two‑year Treasury yields rose and the dollar strengthened as traders pulled back from expecting more immediate easing.
Who does this affect?
This matters for investors in risk assets — crypto holders, equity traders and anyone holding growth and tech stocks that are sensitive to rate moves. Companies like Meta and Microsoft that disappointed investors are already weighing on sentiment, hitting broader market confidence. It also affects policymakers and market participants who rely on timely economic data, since the shutdown’s data gaps increase uncertainty for decisions.
Why does this matter?
A cautious Fed reduces the odds of a quick series of cuts, which can cap near‑term upside and keep volatility elevated across stocks and crypto. If the Fed winds down QT in December and liquidity eases, risk assets including bitcoin could get a lift, but that outcome isn’t priced in yet. With the data blackout and global events like the BOJ meeting and US‑China talks, uncertainty is likely to keep markets choppy and make traders more defensive.