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The U.S. central bank has lowered interest rates by 25 basis points, but according to economists, the Fed is primarily trying to maintain a very delicate balance. The economy hasn’t collapsed, but the labor market is clearly cooling: employment growth is slowing, unemployment is rising, and the Fed explicitly acknowledges that downside risks to jobs are increasing.
That sentence weighs heavier than all others in the statement. It’s the signal that the labor market now takes priority. Could this also have implications for bitcoin?
A Defensive Rate Cut #
Remarkably, the Fed simultaneously admits that inflation has picked up again and remains “somewhat elevated.” A rate cut under these conditions means this step wasn’t intended as a victory over inflation, but as protection against weakening labor dynamics.
Federal Reserve issues #FOMC statement: https://t.co/GHW27inNE3
— Federal Reserve (@federalreserve) December 10, 2025
The rest of the statement, with much emphasis on data dependence and cautious language, is meant to temper investors: one rate cut doesn’t mean a full cycle.
The Real Message is in the Balance Sheet Footnote #
In a relatively unnoticed part of the statement lies what analysts consider the most important signal: the Fed notes that reserve balances at banks are “at the low end of ample” and gives its operating desk permission to buy T-bills when needed to maintain reserves.
In plain language: the buffer in the financial system is getting thin.
This moment is crucial. The Reverse Repo Facility (RRP), for years a reservoir of excess liquidity, is virtually empty. This means the upcoming large drains, like tax payments in April and the substantial government bond issuances already planned, will no longer come from the RRP but directly from bank reserves.
Without precautionary measures, this could lead to tensions like in 2019, when the money market temporarily seized up.
The Fed is trying to get ahead of this now: ending QT, a modest rate cut for optical calm, and quietly installing a mechanism to replenish reserves when necessary.
Officially, this is “not QE,” but markets react to marginal liquidity, not labels.
Divided Committee #
The vote ratio reveals how tense the situation is: one policymaker wanted 50 basis points, two wanted no cut at all. This shows the full emotional range within the Fed: some fear the labor market is weakening much faster than visible, others still don’t trust the inflation path.
The final 25 bp is a political compromise: “We’re adjusting, but we’re not panicking.”
For the bitcoin price, this appears to be a positive meeting. The U.S. central bank is choosing to protect and thus stimulate the economy more. In doing so, they’re essentially accepting that inflation is slightly higher than desired. Typically, that’s a good sign for bitcoin.