Good morning, investors. Ahead of the Federal Reserve announcement on Wednesday, I met Michael Saylor in New York City at the Bitcoin Treasuries Unconference. He said that not buying bitcoin in the modern economy is like not using AI in the modern workforce.

More on that later. Today we’re focusing on the Fed.

The Federal Reserve is moving forward with a range of opinions. 

On Wednesday, policymakers lowered interest rates by 25 basis points, as expected, with just one dissenting vote from newly appointed Fed Governor Stephen Miran, who sought a half-point cut. 

While the central bank showed a high degree of unity for the September meeting, its Summary of Economic Projections — also know as the dot plot — revealed a fractured outlook for rates. 

According to the dot plot, six officials see no more rate cuts for 2025, two officials favor one more cut, and nine want two additional cuts.

Meanwhile, one policymaker wants a rate hike. 

And another, presumably the Trump-appointed Miran, sees the equivalent of five cuts by Christmas.

“It’s a wide dispersion of views, and I think that’s understandable and natural in the current situation,” Fed Chair Jerome Powell said in his press conference, calling today’s economy “historically unusual.”

Both Governors Michelle Bowman and Christopher Waller, who were seen as possible dissenting voices, both voted for 25 basis points.

The median forecast among the central bankers puts the fed funds rate at 3.6% by year-end, though projections span from 2.9% to 4.4%. 

Shortly after the news, odds on the prediction market Kalshi for three cuts total this year spiked to 67% from 48% the day prior.

Powell, asked whether the historic downward jobs revision released this month changed his view on holding rates earlier in the year, brushed off the counterfactual. 

“We have to live life looking through the windshield rather than looking through the rearview mirror,” he said. 

To that point, the Fed Chairman also acknowledged that tariffs have not been nearly as inflationary as expected earlier in the year.

Costs related to the levies, Powell said, have been primarily picked up by the companies that sit in between exporters and consumers.

“The [tariff] pass-through has been pretty small,” Powell said. “It’s been slower and smaller than we thought.”

In any case, the Fed’s lack of unity presents a puzzle for markets.

When policymakers themselves can’t agree on borrowing costs, investors have no choice but to interpret the data as a proxy battle between hawks and doves, which could ultimately stir more trading volatility. 

Dating back to 1957, the S&P 500 has averaged nearly 10% returns in the year after rate cuts began.

Some cycles have seen rallies north of 30%, while others — like in 2001 and 2008 — have turned negative.

“Powell’s tone and words in his press conference do indicate this was more a defensive move to avoid more weakness in the labor market and not one designed to spur a lot more growth,” said Steve Wyett, chief investment strategist at BOK Financial.

“We think growth will be fine anyway."

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📉 China doesn’t want its tech companies buying Nvidia chips. Shares of Nvidia dropped after Beijing’s top cybersecurity regulator urged domestic tech companies not to purchase products from the company. That said, Jensen Huang seemed unbothered. (WSJ)

🏘 Scott Bessent allegedly made contradictory mortgage pledges. The Treasury Secretary previously agreed to occupy two different houses at the same time as his “principal residence,” according to a new report, which is a similar allegation as the one the White House has leveled at Fed Governor Lisa Cook. (Reuters)

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📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.

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