Overview
- The FOMC lowered the policy rate by 25 basis points to 4% and confirmed quantitative tightening will halt on December 1 after two years of balance-sheet runoff.
- Jerome Powell said policy is "sufficiently restrictive" and emphasized readiness to adjust balance-sheet tools to keep reserves ample, describing the shift as risk management rather than the start of a full easing cycle.
- With the overnight reverse repo facility near $14 billion, additional QT would drain bank reserves directly, elevating the impact of balance-sheet policy on real yields and the dollar.
- The Fed’s balance sheet is about $6.6 trillion and reserves roughly $3 trillion, and the decision drew two dissents—Jeffrey Schmid favored no cut and Stephen Miran argued for a 50-basis-point cut.
- Crypto watchers link the liquidity turn to risk appetite, with about $446 million in net inflows to US spot Bitcoin ETFs reported in the week before the meeting, though some crypto media are promoting specific tokens alongside this narrative.