WHAT WAS DECIDED
The Fed cut rates by 25 basis points as widely expected, bringing the target range to 5.00–5.25%. The vote was unanimous — no dissents, signaling committee cohesion heading into a data-dependent period.
KEY LANGUAGE CHANGES
The phrase "additional firming may be appropriate" was removed — a clear dovish signal. "Inflation remains elevated" softened to "somewhat elevated." New addition: language acknowledging tariff uncertainty as an upside inflation risk.
WARSH'S TONE
More hawkish than the statement itself. Warsh emphasized patience, pushed back on aggressive cut expectations, and explicitly said they are "not in a hurry." Classic Fed speak for: don't price in more than 2 cuts this year.
WHAT THIS MEANS FOR MARKETS
Equities rallied on the cut but gains may fade on Warsh's hawkish tone. Bond yields fell on the decision then partially reversed during Q&A. Dollar weakened initially. Bitcoin up 2.1% — risk-on reaction. Watch the 10Y yield — if it reverses above 4.30% the equity rally is in trouble.