{"id":55273,"date":"2025-10-29T15:08:43","date_gmt":"2025-10-29T19:08:43","guid":{"rendered":"https:\/\/stockmarketwatch.com\/stock-market-news\/powell-signals-caution-on-future-cuts-despite-todays-rate-reduction-markets-react-negatively\/55273\/"},"modified":"2025-10-29T15:08:43","modified_gmt":"2025-10-29T19:08:43","slug":"powell-signals-caution-on-future-cuts-despite-todays-rate-reduction-markets-react-negatively","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/powell-signals-caution-on-future-cuts-despite-todays-rate-reduction-markets-react-negatively\/55273\/","title":{"rendered":"Powell Signals Caution on Future Cuts Despite Today&#8217;s Rate Reduction; Markets React Negatively"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li>The Federal Reserve delivered a <strong>rate cut<\/strong> today, but Chair Jerome Powell&#39;s cautious remarks on future easing, stating a December cut is &quot;not a foregone conclusion,&quot; led to a negative market reaction.<\/li>\n<li>The Fed signaled its intention to <strong>freeze its balance sheet size by December 1<\/strong>, effectively ending quantitative tightening (QT), giving markets time to adapt.<\/li>\n<li>US stock markets experienced <strong>extended losses<\/strong>, and Treasury yields rose, as traders significantly trimmed their bets on a December Fed rate cut, with odds dropping to <strong>71% from 90%<\/strong>.<\/li>\n<li>Germany convened its <strong>first national security meeting<\/strong> to discuss a rare earth supply strategy, highlighting growing concerns over critical raw material dependencies.<\/li>\n<\/ul>\n<p>The Federal Reserve&#39;s Open Market Committee (FOMC) today approved an interest rate cut with a &quot;strong, solid vote,&quot; yet Federal Reserve Chair Jerome Powell immediately tempered expectations for future easing, stating that a December rate cut is &quot;not a foregone conclusion&quot; and &quot;far from it&quot;. This cautious stance, despite the immediate rate reduction, weighed heavily on market sentiment.<\/p>\n<p>Powell acknowledged &quot;strongly differing views&quot; within the committee regarding the path forward, emphasizing the tension between the Fed&#39;s dual goals of maximizing employment and maintaining price stability. He described today&#39;s rate cut as a measure for &quot;risk management&quot;. While inflation remains &quot;somewhat elevated&quot; relative to the Fed&#39;s 2% goal, Powell noted that disinflation appears to be continuing for services, and most measures of long-term inflation expectations are consistent with the Fed&#39;s target. He also indicated that the labor market is &quot;not clearly declining quickly&quot;.<\/p>\n<p>In a significant policy shift, Chair Powell confirmed support within the committee to announce a <strong>December 1 freeze of the balance sheet size<\/strong>, effectively ending the process of quantitative tightening (QT). Powell noted there was &quot;not a lot of benefit in holding on to get the last few dollars of QT,&quot; and that the December 1 date would provide markets with time to adapt to the change. He clarified that expanding the balance sheet was <em>not<\/em> discussed during today&#39;s meeting.<\/p>\n<p>Following Powell&#39;s press conference, US stock markets extended their losses, with the <a href=\"https:\/\/stockmarketwatch.com\/indices\/sp500\/today\" data-internallinksmanager029f6b8e52c=\"3\" title=\"snp500 today\">S&amp;P 500<\/a> (<a href=\"\/stock\/SPX\">SPX<\/a>) down <strong>0.5%<\/strong>, the Dow (<a href=\"\/stock\/DJI\">DJI<\/a>) down <strong>0.5%<\/strong>, and the Nasdaq (<a href=\"\/stock\/IXIC\">IXIC<\/a>) down <strong>0.2%<\/strong>. The S&amp;P 500 (<a href=\"\/stock\/SPX\">SPX<\/a>) specifically slipped 0.3% as Powell\u2019s comments impacted market sentiment. Traders reacted swiftly, trimming their bets on a December Fed rate cut, with odds dropping sharply to <strong>71% from 90%<\/strong> earlier in the day. Rate futures also fell, and US Treasury yields extended their gains, with the 10-year yield (<a href=\"\/stock\/US10Y\">US10Y<\/a>) rising <strong>6.2 basis points to 4.041%<\/strong>.<\/p>\n<p>In other global news, Brent Crude futures settled at <strong>$64.92 per barrel<\/strong>, marking an increase of <strong>$0.52 or 0.81%<\/strong>. Separately, Germany held its first national security meeting to discuss a rare earth supply strategy, signaling a proactive approach to securing critical resources amidst global supply chain uncertainties.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways The Federal Reserve delivered a rate cut today, but Chair Jerome Powell&#39;s cautious remarks on future easing, stating 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