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Bitcoin Updates: Fed Divided Over Rate Reduction Amid Conflicting Inflation and Employment Concerns

Bitcoin Updates: Fed Divided Over Rate Reduction Amid Conflicting Inflation and Employment Concerns

Bitget-RWA2025/11/07 17:00
By:Bitget-RWA

- Fed officials debate December rate cuts amid conflicting inflation data and labor market risks, with no consensus on policy path. - Short-term inflation expectations rose to 4.7% in Nov 2025, while long-term forecasts stabilized at 3.6%, reflecting cautious public confidence. - Government shutdown delays critical economic data, forcing policymakers to rely on limited information as officials warn against both high rates and rapid cuts. - Tech/industrial firms showed resilience with strong Q3 earnings, co

Federal Reserve policymakers are split over the direction of monetary policy, as mixed economic signals and shifting market expectations make the central bank’s next move uncertain, according to

. Although rose to 4.7% for November 2025, projections for the longer term have steadied, indicating that households and businesses remain cautious but not alarmed. This scenario unfolds as the Fed tries to navigate the risks to its dual mandate of full employment and stable prices, with the December meeting now considered a possible—though not guaranteed—moment for a rate reduction.

The discussion has grown more urgent as a government shutdown has postponed key economic reports, leaving Fed officials to make decisions with incomplete data. Fed Governor Lisa Cook, who is currently involved in a legal dispute with President Donald Trump regarding her dismissal, highlighted the delicate balance between inflation and employment risks. She cautioned that keeping rates high could sharply weaken the labor market, while cutting rates too quickly might destabilize inflation expectations. San Francisco Fed President Mary Daly shared this perspective, describing the recent rate cut as a safeguard against job losses and urging a prudent approach for December.

At the same time, broader economic data remains mixed. Technology and industrial companies have shown strength, with

surpassing estimates due to robust cloud revenue, and and improved its profit forecast for 2025. and also exceeded expectations, reflecting resilience in important industries. In contrast, the cryptocurrency sector saw experience over $3 billion in outflows last week, as investors took profits and uncertainty about Fed policy grew.

The possibility of the Fed moving toward a looser monetary stance has caught the eye of both investors and analysts. Billionaire

that expanding the Fed’s balance sheet could lead to “financial-asset inflation,” pushing up the value of gold and alternative assets such as . He connected the Fed’s potential policy shift to increased liquidity, which lowers real yields and channels money into riskier investments. Still, technical analysts warn that Bitcoin’s price remains vulnerable, with important support levels being tested.

While short-term volatility persists, expectations for inflation over the long run remain steady. The University of Michigan’s five-year inflation projection dropped to 3.6% in October, the lowest in four months, reflecting trust in the Fed’s ability to restore price stability. This confidence is crucial as officials consider their December decision, with markets currently assigning about a 50% probability to a rate cut.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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