What did Powell say? The financial markets instantly boiled! The three major indexes surged wildly, and gold rose in the short term.

The Federal Reserve announced on Wednesday another 25 basis point cut in the federal funds rate, marking the third rate cut of the year. Despite meeting market expectations of a "hawkish cut," the meeting revealed the most serious division of opinion within the committee since 2019, coupled with a noticeable withdrawal in the policy statement, leading the market to believe that the space for future rate cuts is narrowing and the Federal Reserve may enter a new "wait-and-see period." The rate decision passed with a vote of 9-3, with three members casting dissenting votes on both ends of the policy spectrum: Chicago Fed President Evans and Kansas City Fed President George preferred to hold rates steady, while Fed Governor Milan advocated for a 50 basis point rate cut. This rare "divided dissent" highlights significant differences in the committee's assessment of the economic situation. Of particular interest in the statement was the Federal Reserve's reintroduction of a key phrase that had been seen as a signal to pause rate cuts that future decisions on the "magnitude and timing" of further rate adjustments will depend on real-time data and economic outlook. This wording was last seen in December 2024, when the Fed quickly paused its rate-cutting path, leading outsiders to view this return as an important signal of a shift towards caution in policy. During the press conference, Fed Chair Powell explained in detail the complexity of the current policy decisions. He explicitly ruled out the possibility of raising rates, stating that "Rate hikes are not anyone's baseline expectation." Powell emphasized that the benchmark interest rate is now in a "broad neutral range," neither significantly restraining the economy nor pushing for demand, putting the central bank in a "good position to wait and see how the economy evolves." Powell rare admitted that the rate cut was "a very close call." He stated that the Fed is facing a rare situation of "rising dual risks": on one hand, the labor market is showing signs of weakness, and on the other hand, tariffs are driving up prices, leading to inflation risks. He added that many members believe that risks of both unemployment and inflation are rising, making policy decision-making extremely challenging." He also noted that due to the government shutdown causing delays in some economic data, the Fed had to make decisions in an "environment of incomplete data." Powell emphasized that the Fed does not pre-set a path for future rate cuts and will decide at each meeting. He reminded the market that since September this year, the Fed has cut rates by a total of 75 basis points and by 175 basis points since last year, stating that the current phase is more suitable for patience rather than hasty action. Influenced by the policy signal, the U.S. stock market rallied across the board, with the Dow rising over 600 points at one point, the S&P 500 up 0.8%, and the Nasdaq up nearly 0.5%. The dollar index plunged 45 points to 98.60, while non-U.S. currencies rebounded. Gold spiked $57 to $4238.78 per ounce. Bitcoin briefly surpassed $94,000. At the same time, President Trump continued to publicly pressure the Federal Reserve. He told reporters at the White House that he had met with former Fed governor Kevin Warsh that day and was accelerating the search for the next Fed chair. Trump said he would not require the candidate to commit to rate cuts but emphasized that "our rates should be lower," adding that "I roughly know what kind of person I'm looking for." Trump also criticized Powell again, calling his decision-making "rigid" and "lacking energy," and saying that the 25 basis point rate cut was "too small, it should at least double." He said, "You can't kill growth with high rates when the country is doing well. And they're doing it now." The Trump administration has been testing the limits of the Fed's independence, hinting at possibly questioning the legality of some Fed governors appointed by former President Biden and attempting to dismiss board member Lisa Cook, a case that has now reached the Supreme Court. According to sources, National Economic Council Director Kevin Hassett remains a top candidate for the new chairmanship, but Treasury Secretary Benson is leading a broader selection process, including Fed governors Waller, Bowman, former governor Warsh, and BlackRock executive Rieder on the candidate list. Trump said the nomination could be announced in the next two weeks or delayed until early 2026.