Tonight's rate cut is already a known factor, lowering the Federal Funds Rate by 25 basis points to 3.5%-3.75%—the third cut of the year. But the real drama isn’t in the rate cut itself; it’s in the internal consensus within the Federal Reserve that’s on the verge of tearing apart.

The dovish side is getting anxious as employment data shows signs of fatigue; they believe the Fed should continue to ease. The hawkish side is even more urgent—inflation remains above the 2% target. Now is not the time to loosen policy, or they risk digging their own grave. Powell is caught in the middle, forced to play a game of "rate cut but no loosening"—cutting the rate but speaking firmly enough to prevent markets from dreaming of more easing next time.

His main focus tonight will definitely not be just announcing a rate cut, but rather how to use language to keep both camps calm. Most likely, he’ll replicate the 2019 script: after the cut, raise the bar for the next easing, emphasize that policy is already quite neutral, and only consider the next step if employment data really deteriorates.

The problem is, a government shutdown has led to key data being unavailable, so this narrative lacks strong backing. The dot plot probably shows only one or two rate cuts remaining by 2026, but market expectations are much higher. This expectation gap is the powder keg for upcoming volatility.

In essence, tonight’s meeting is less about economic regulation and more about managing expectations. Powell needs to make the hawks feel "the gates are closed," while convincing the doves "they can still turn the key at critical moments." But with such deep internal divisions, any vague statement could be misinterpreted by the market.

If the dot plot or press conference leans hawkish, U.S. Treasury yields could keep rising, putting pressure on risk assets like BTC, ETH, SOL, and others. Market noise is changing daily—don’t let emotions lead the way. Focusing on core logic is more reliable than chasing hot topics.