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After the Fed delivered a widely anticipated 25bp rate cut, capping the federal funds target at 4.00-4.25%, markets reacted violently to mixed signals: the FOMC statement acknowledged a weakening job market and rising unemployment, while economic projections forecast inflation to remain elevated and growth modest, creating tension between dovish and hawkish narratives. Powell’s press conference label of the move as a “risk management” cut was initially interpreted as dovish, pushing UST10Y below 4.00%, but later remarks emphasizing inflation risks and uncertainty restored hawkish expectations, spurring yields higher; UST10Y closed at ~4.074% (+~6bp), 2Y at ~3.553% (+~5.8bp). The dot-plot revealed expectations of three more cuts in 2025 versus two previously, while 2026 forecasts dropped to only one further cut, reinforcing the idea that policy easing will be gradual. Overall, the meeting shifted the stance from tight to neutral—but with inflation and employment divergence still anchoring long-term yield upside.