The Federal Reserve's decision to cut interest rates by 25 basis points brings the benchmark rate down from 5.25%-5.5% to 5.0%-5.25%. This is the third consecutive rate cut since September 2024. However, market focus has long shifted away from the rate cut itself and is now more concerned with the future policy direction.

Simple and straightforward interpretation of the key points:

1. No surprises with the rate cut, neutral stance set
The 25 basis point cut fully aligns with market expectations of 100%, confirming a dovish stance but not leaning hawkish or dovish overall, representing a purely neutral move.

2. Dot plot signals key message, rate cut pace significantly slowed
The core focus of policy lies in the dot plot and Powell's speech: the median expectation for rate cuts in 2025 has been revised down from 4 times (a total of 1%) to 2 times (a total of 0.5%), and the 2026 rate cut expectation has also been reduced by one. This is equivalent to the Fed directly telling the market: stop dreaming of rates falling to 3% in 2025, rate cuts are slowing down.

3. Powell's statement reveals the policy stance: calibrating for stability, not speed
Powell's core message can be summarized as: the Fed is recalibrating its restrictive monetary policy stance, but the pace of adjustment will be slower than before — the reason is clear: inflation has not yet fully fallen back to the 2% target, and the labor market remains resilient.

In plain language: the current economic fundamentals are not that bad, inflation is still sticky, and I won't rush to cut rates significantly. It’s better to proceed slowly to avoid overdoing it and pushing inflation higher again.

4. Market impact: short-term pressure and decline, long-term steady climb
In the short term, US stocks, US bonds, gold, and Bitcoin all declined collectively, mainly because the market had previously bet heavily on 5-6 rate cuts in 2025, and now those expectations have been sharply cut, naturally putting pressure on sentiment;
In the medium to long term, the situation is far from pessimistic. The probability of a soft landing for the US economy remains the highest, but the bull market rhythm has shifted from "rapid acceleration" to "steady climb."