The Federal Reserve lowered rates by 25 basis points to 4.25%, in line with expectations. Markets initially welcomed hints of two more cuts later this year, but Chair Powell quickly tempered enthusiasm.By downplaying concerns over the labor market and emphasizing immigration’s impact on labor supply, Powell shifted sentiment, leaving traders uncertain about the path ahead.

Why It Matters: Historically, once the Fed begins cutting, a sequence of reductions tends to follow. Powell’s comments, however, suggested a slower trajectory than markets anticipated. This has implications for gold, the U.S. dollar, and financial stocks, which may benefit if borrowing costs remain elevated for longer.

Market Headlines:

• December meeting now pivotal, with only 43.7bps of cuts priced in through year-end.

• China holds rates steady at 1.40%, citing resilient exports.

• Bank of England likely to slow its quantitative tightening while keeping policy rate at 4%.

• SEC clears new standards for crypto ETFs beyond Bitcoin and Ethereum.