The Federal Reserve has moved again, this time cutting interest rates by 25 basis points, bringing the federal funds rate to the 3.50%-3.75% range. Since this cut, it has been the sixth easing in 2023, with the pace becoming increasingly frequent.

The official statement remains the usual—"moderate economic expansion." But a closer look at the statement reveals a less optimistic tone: employment growth is slowing, the unemployment rate is rising, and inflation remains stubbornly high. More importantly, the phrase "economic outlook remains uncertain" translates to: We don’t know what will happen next; we can only cut rates first and see what happens.

In fact, there was intense debate inside the Fed about the impact of tariffs and whether to continue cutting rates in December. But recent employment reports have shown such poor data that there’s no room for disagreement; the dovish camp has taken the upper hand. Trump’s side even said the cut could be larger—he has always hoped for more aggressive rate cuts.

Currently, it’s a tightrope walk: trying to control inflation while fearing economic stall. The next move depends on whether CPI data and non-farm employment reports can give us some clues. For those of us watching the markets, rate cuts usually mean ample liquidity, but whether this can translate into gains for risk assets depends on how dovish the Fed will be in the future.