Fed 25bp Cut but Hawkish Signal—RMP Bond Buys, Internal Split, and Slower Future Cuts

The Federal Reserve cut the federal funds rate by 25 basis points to 3.50–3.75%—its third 25bp cut this year—but signaled a slowdown in future easing. The FOMC’s dot plot still shows one 25bp cut next year, yet internal disagreement was the largest in six years with three dissenting votes. The Fed also launched a Reserve Management Purchase (RMP) program to buy $40 billion of short-term Treasury bills in the first 30 days (initial pace $40bn) to ensure adequate reserves and ease short-term money-market stress; purchases may remain elevated for several months before tapering. Chair Jerome Powell emphasized patience: no one on the committee is forecasting future rate hikes as the baseline, and the Fed will watch employment and inflation data closely. Officials modestly raised GDP forecasts for the near term, slightly lowered 2027 unemployment forecasts, and trimmed PCE inflation and core PCE projections by 0.1 percentage point for this year and next. Market-implied odds from CME show high probability (~88%) of this week’s 25bp cut but delayed chances for additional cuts until mid-2026, a pattern dubbed “hawkish cut.” For crypto traders: this mixed message—lower rates and active short-term Treasury purchases but a more cautious path ahead—can support risk assets in the near term (liquidity boost) while reducing conviction for a multi-cut, prolonged dovish cycle. Watch US jobs, PCE inflation prints, and the Fed’s RMP purchase pace for triggers that could drive volatility in BTC, ETH and equity-correlated crypto names.