The latest Federal Reserve decision has stirred the markets—what are the key takeaways from this meeting?

First, about the rate cut—The federal funds rate target range was lowered by 25 basis points to 3.50%-3.75%, marking the third cut this year. However, the voting breakdown reveals some nuances: 9 votes in favor, 3 against, indicating that there isn't complete consensus internally on continuing rate cuts.

What about 2026? According to the latest dot plot, officials expect the rate to be around 3.4% by the end of the year. In other words—mainstream voices next year are only likely to cut rates once, and the pace is much more conservative than some market participants anticipated.

Another notable move: The Fed announced it will begin purchasing approximately $40 billion of short-term Treasury securities starting December 12. It’s important to clarify—officials explicitly said this is not quantitative easing. Essentially, it’s a technical operation for short-term liquidity management aimed at easing overnight funding pressures.

After the decision was announced, US stocks rallied. However, it’s worth noting that since the pace of future rate cuts might slow and bond purchases are only a short-term measure, the durability of this rebound remains uncertain.