Federal Reserve Slashes Rates Again: 25bps Cut Marks 2nd Move This Year

The Fed just fired another shot across the bow of traditional finance.

Liquidity Floodgates Creak Open

For the second time in 2024, the central bank has opted to ease monetary policy. That 25 basis point reduction isn't just a number on a screen—it's a direct injection of cheaper capital into the system. Wall Street gets its sugar rush, but the long-term hangover? That's a problem for future quarters.

The Real Signal Isn't in the Statement

Look past the carefully worded press release. Two consecutive cuts paint a clear picture: the economic data is softer than they'd like to admit. It's a defensive move, a tacit acknowledgment that the old levers need greasing. Meanwhile, digital asset markets have been pricing in this liquidity for months—trading on the expectation, not the announcement.

Cheap Money's New Playground

Historically, this kind of action sends investors scrambling for yield. But the 20th-century playbook—rotating into bonds or real estate—is gathering dust. The smart capital is already looking elsewhere, towards programmable, borderless assets that operate on a different clock. Why wait for traditional markets to catch up when the frontier moves at blockchain speed?

Another cut, another nod to a slowing engine. The Fed is doing what it always does: managing the decline of the old system with incremental tweaks. The real innovation—and the real risk—is being built off their balance sheet.

Unlike October’s rate cut decision, this time around, more government data, including jobs data, is available. Job openings increased by 12,000 to 7.670 million in October. However, hiring decreased by 218,000 to 5.149 million. The latest inflation data won’t be released until January, after TRUMP decided to push the release of data for the first time in 12 years. This sparked concern amongst Fed members and economic experts, worried that a Fed rate cut would.

The Dow Jones index roared up by 230 points following the Fed’s interest rate cut. Meanwhile, the S&P 500 and Russell indexes are also higher. Along with its final policy decision of the year, the Fed also published its final Summary of Economic Projections (SEP) for 2025, which includes forecasts from Fed officials on economic growth, inflation, and interest rates for the coming years. The SEP showed the Fed’s median forecasts calling for one interest rate cut in 2026 in line with September’s projections.

Furthermore, the Federal Reserve also says it plans to have at least one additional interest rate cut in 2026, but doesn’t have an estimated date for that cut. Three fed officials, including Trump-favored Stephen Miran, voted against the cut, with Miran preferring a steeper 50 bps cut.