Bitcoin News Today: Fed Splits on Rate Cut as Inflation and Jobs Risks Clash

Federal Reserve officials remain divided on the path forward for monetary policy, with conflicting signals from economic data and market expectations complicating the central bank's next steps, as detailed in Fed Officials Debate December Rate Cut. While US 1-year inflation expectations edged up to 4.7% in November 2025, long-term forecasts have stabilized, suggesting a cautious but not panicked outlook among households and businesses . This backdrop comes as the Fed grapples with balancing risks to its dual mandate of maximum employment and price stability, with December's policy meeting now described as "live" for a potential rate cut, though not a certainty .

The debate has intensified amid a government shutdown that has delayed critical economic data, forcing policymakers to rely on limited information. Fed Governor Lisa Cook, embroiled in a high-stakes legal battle with President Donald Trump over her removal, emphasized the tension between inflation and labor market risks. She warned that maintaining elevated rates could trigger a sharp labor market deterioration, while rapid cuts risk unanchoring inflation expectations . San Francisco Fed President Mary Daly echoed this duality, calling the recent rate cut "insurance" against weakening employment and urging caution in December .

Meanwhile, broader economic indicators paint a mixed picture. Technology and industrial firms reported resilience, with Teradata Corp's Q3 earnings exceeding forecasts on strong cloud revenue growth, and Sealed Air beat Q3 sales expectations while raising its 2025 profit outlook. AIG reported third-quarter 2025 earnings and Summit Hotel Properties reported Q3 results also outperformed, signaling durability in key sectors . These results contrast with crypto markets, where Bitcoin and Ethereum ETFs saw over $3 billion in outflows last week, driven by profit-taking and uncertainty over Fed policy .

The Fed's potential shift toward easier monetary policy has drawn attention from investors and analysts. Billionaire Ray Dalio warned that balance-sheet expansion could fuel "financial-asset inflation," boosting gold and other stores of value like Bitcoin. He linked the Fed's pivot to liquidity injections that lower real yields and drive capital into risk assets . However, technical analysts caution that Bitcoin's price action remains fragile, with critical support levels under pressure .

Despite short-term volatility, long-term inflation expectations remain anchored. The University of Michigan's five-year inflation outlook fell to 3.6% in October, a four-month low, indicating confidence in the Fed's ability to return price stability . This stability is critical as policymakers weigh December's decision, with markets currently pricing in a roughly 50% chance of a rate cut .