Good morning, Asia. Before the bell, markets are struggling to find direction after the Federal Reserve cut rates as expected, but offered little clarity on what comes next.
Bitcoin slipped under $110,000, extending losses as traders turned cautious following Jerome Powell’s measured tone.
Asian equities opened mixed. Equities in Japan and Australia dipped, tracking weakness in US contracts after the S&P 500 reversed earlier gains.
Wall Street ended mixed as Meta warned of higher 2026 expenses and Microsoft’s Azure growth disappointed investors.
Market snapshot
Bitcoin: $110,622, down 1.7% Ether: $3,930, down 1.7% XRP: $2.58, down 1.3% Total crypto market cap: $3.83 trillion, down 1.1%Fed Delivers 25bp Cut as Powell Warns Data Gaps Could Skew Policy Path
The Fed cut its benchmark rate by 25 basis points to a range of 3.75% to 4%, its first move in months, but Powell urged restraint on expecting another reduction this year. He said policymakers are reassessing risks to the labor market and will remain cautious, especially as the government shutdown limits access to economic data.
“The cut was priced in — that was very clear to me,” said Maja Vujinovic, CEO and co-founder of Digital Assets at FG Nexus. “A lot of people in my crypto chats were expecting a little bit of a bump, but the market keeps selling off. Powell’s stance came across as less dovish, and traders were hoping for a signal of more aggressive or frequent future cuts.”
The central bank’s statement acknowledged the data blackout caused by the shutdown, warning it could complicate future decisions if job and inflation reports remain unavailable. Markets quickly pared bets on further easing, pushing two-year Treasury yields up 11 basis points and giving the dollar a lift.
Fed Cut Fails to Ignite Rally as Powell Strikes a Guarded Note
In Asia, investors will watch for the Bank of Japan’s policy decision on Thursday, where rates are widely expected to stay unchanged at 0.5%. The meeting will be the first under Prime Minister Sanae Takaichi, who is viewed as supportive of continued monetary easing.
Meanwhile, diplomatic focus shifts to South Korea, where US President Donald Trump and China’s Xi Jinping are expected to meet later today. The two leaders are preparing to finalize a limited reconciliation that could pause new tariffs and restart trade in key commodities such as soybeans.
Fed’s December QT Wind-Down Seen as a Key Catalyst for Broader Risk Assets
Macro uncertainty is still high, Vujinovic said. “Many investors are taking profits at these resistance levels and reducing exposure until there’s more clarity from both the Fed and the broader global economy,” she said.
Greg Magadini, director of derivatives at Amberdata, said the policy shift could still favor crypto once liquidity conditions ease.
“We’re still in the early stages of a cutting cycle and easing liquidity will help push prices higher and bring volatility back down for BTC,” he said.
He added that the end of the Fed’s quantitative tightening (QT) plan in December should support broader risk sentiment. “FOMC coming in as expected helps reinforce the lower volatility environment,” Magadini said. “As long as liquidity remains easy, we expect crypto to rally into year-end.”
For now, though, uncertainty dominates the market. Traders are adjusting to a Fed that just turned slightly more cautious, a government that’s partially shut down, and a data void that leaves markets guessing what comes next.
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