Fed Slashes Rates Again: Third 25bps Cut This Year Signals Economic Shift

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

Liquidity Unleashed

That's three separate 25 basis point cuts in a single calendar year—a clear pivot from the hawkish posturing of recent memory. Money's getting cheaper. The traditional playbook says this should send investors scrambling for yield.

Where Does the Money Flow?

Historically, easy money finds its way into risk assets. With bond yields compressing and savings accounts offering returns that barely outpace inflation—a classic banker's 'generosity'—the search for asymmetric upside intensifies. Digital assets, built for a high-liquidity environment, often sit squarely in that crosshair.

The old guard might fret about inflation; the new one is already redeploying capital. Another cut isn't just a policy move—it's a signal that the financial landscape is being remade in real-time. Whether the traditional system is ready for the consequences is, as always, the trillion-dollar question.

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.