Fed Cuts Interest Rates by 25 Bps at FOMC Meeting, Matching Expectations

The U.S. Federal Reserve has made the third Fed rate cut of the year following today’s FOMC meeting, in line with expectations. Crypto market participants will now turn their attention to Fed Chair Jerome Powell’s speech for guidance on whether the committee is currently hawkish or dovish.

FOMC Makes Third Fed Rate Cut Of The Year

In a press release, the committee announced that it has decided to lower the target range for the federal funds rate by 25 basis points (bps) from between 3.75% and 4% to 3.5% and 3.75%. This comes in line with expectations, as CME FedWatch data had earlier today shown a 90% chance of a 25 bps cut.

9 FOMC members voted in favor of a 25 bps Fed rate cut while three voted against. Fed Presidents Austan Goolsbee and Jeffrey Schmid dissented in favor of no rate change, while Miran dissented in favor of a 50 bps cut.

This marks the third Fed rate cut of the year, following the rate cuts at the September and October FOMC meetings. As CoinGape reported, analysts at major U.S. banks such as JPMorgan had predicted a hawkish cut, with Powell signaling fewer cuts ahead.

As such, the focus will now be on Powell’s FOMC press conference to see whether the Fed is currently leaning hawkish or dovish. The Fed has so far focused on the softening labor market, which prompted the three cuts this year.

However, with inflation still way above their 2% target, the FOMC may hold off on further Fed rate cuts heading into the new year until they see an improvement in the inflation data. Notably, the Fed will have more data to work with as the Department of Labor has scheduled the release of the PPI inflation report for January 14, two weeks ahead of the January FOMC meeting.

The Federal Reserve’s summary of economic projections shows that the median projection remains only one 25-bps rate cut in 2026. Meanwhile, the PCE and core PCE were revised lower from the September projections. Unemployment rate remained unchanged, and GDP was revised higher.

Fed To Begin Purchasing U.S. Treasury Bills

In addition to the Fed rate cut announcement, the U.S. central bank also said it will begin purchasing treasury bills on December 12 and buy up to $40 billion in T-bills within 30 days. This marks a positive for the crypto market as it would inject more liquidity into the markets.

Market expert James Lavish noted that this is, in fact, quantitative easing (QE), although the Fed will label it ‘Reserve Management.’ He added that this marks a pivot toward expanding the Fed’s balance sheet, adding liquidity to markets.

The Fed will label it ‘Reserve Management’, they will say it is ‘Temporary’, and they will insist it is ‘NOT QE’. But the reality is that this is a pivot to expansion of the Fed balance sheet, adding liquidity to markets, and is in fact, Quantitative Easing. https://t.co/uCyrgS72iF

— James Lavish (@jameslavish) December 10, 2025

Market commentator Milk Road stated that the purchase of treasury bills isn’t headline QE but functions like a stealth version of it. Milk Road further noted that while Fed rate cuts move policy, bill buying “moves the plumbing.”