Nic Puckrin, investment analyst and co-founder of The Coin Bureau, says today’s Federal Reserve rate cut of 25 basis points was not quite as hawkish as many were expecting, with markets breathing a sigh of relief. Bitcoin and the S&P were both heading higher on the news.
Puckrin said the Federal Reserve’s plans to buy $40 billion in Treasury bills over the next 30 days were also received positively. He believes that there were fewer dissents than expected; only three members disagreed with the decision.
“However, it is worth noting that the Fed is now expected to cut rates only once next year – fewer cuts than investors were hoping for,” said Puckrin. “This could still change, since next year does bring a historic changing of the guard, but Chair Jerome Powell still remains at the helm for the first three FOMC meetings of 2026.”
Puckrin believes the diverging opinions within the FOMC create some uncertainty going forward.
“And as any investor knows, markets are allergic to uncertainty. This puts a lid on the rally for risk assets heading into the end of the year.”
Puckrin said the announcement was not enough to kick off a Santa rally for Bitcoin, and he does not see any near-term catalysts right now.
“With further rate cuts now off the table for a while, attention will turn to liquidity and the Fed’s balance sheet policy in early 2026. However, despite the Treasury bill purchase announced today, QE isn’t coming until things start breaking – and that always means more volatility and potential pain,” said Puckrin.
Isaac Wheeler, Managing Director of Balance Sheet Strategy at Derivative Path, noted the cut was widely anticipated and that rather than endorsing future cuts, Chairman Powell described the rates as neutral.
“Both the employment and inflation pictures appear to be improving for the FOMC. While some dual mandate tension remains, the Fed has optionality now and will look to stay noncommittal until it receives the substantial amount of data scheduled over the next few weeks,” said Wheeler. “Also of note was the FOMC’s announcement of reserve management purchases (RMP). While not a complete surprise, the Fed’s decision to accelerate its Treasury bill buying to $40B in the next month speaks to the degree of misbehavior in market-based overnight rates like SOFR and the desire to avoid further dislocation between Fed Funds and SOFR.”