The Federal Reserve has cut interest rates for the third consecutive time this year, lowering the federal funds rate target range by 25 basis points to 3.50%-3.75%. This marks the sixth rate cut since September 2024.

In its post-meeting statement, the Federal Open Market Committee (FOMC) noted that U.S. economic activity continues to expand at a moderate pace, though job growth has slowed and unemployment has risen slightly. Inflation remains elevated, and economic uncertainties persist, prompting the rate cut.

President Trump criticized the move, calling the reduction "too small" and suggesting rates should be "much lower." He also mentioned meeting with former Fed Governor Kevin Warsh, a potential candidate for Fed chair, emphasizing his preference for an "honest person" on interest rates. Meanwhile, White House economic advisor Hassett hinted at further cuts, stating that stronger economic data could justify a 50-basis-point reduction.

Fed Chair Jerome Powell defended the decision, stating that the cumulative 75-basis-point cut over the past three meetings aims to stabilize the labor market and return inflation to the 2% target. He attributed current inflation pressures primarily to tariffs, calling their impact "transitory."

Key takeaways from Powell’s remarks: 1. No plans for rate hikes; markets expect either a pause or further cuts. 2. Inflation remains elevated due to tariffs; otherwise, it would be near 2%. 3. Unemployment has risen slightly, with AI partly contributing to job market softness. 4. The Fed is now at the higher end of the neutral rate range. 5. Treasury purchases may remain elevated before tapering. 6. Housing affordability challenges persist despite rate cuts.

Market Reaction: - U.S. stocks rose, with the Dow up 1.05%. - Spot gold gained 0.46% to $4,227.37/oz, while COMEX gold futures rose 0.50%. - Spot silver surged 1.83% to $61.7854/oz, hitting a record high during Powell’s speech. COMEX silver futures jumped 2.27% to $62.230/oz. - The dollar index fell 0.43% to 98.789.

**Silver’s Rally: How Long Can It Last?** COMEX and Shanghai silver futures both hit record highs, with COMEX silver breaching $62/oz and Shanghai’s main contract up 5.44%. Analysts attribute the surge to structural demand shifts, including U.S. tariff-driven stockpiling and strong ETF inflows.

Haitu Futures’ Gu Jianan highlighted tight physical supply, with leasing rates spiking to 35% in October. Everbright Futures’ Zhan Dapeng cited macro, supply-demand, and sentiment drivers, noting a five-year global silver deficit.

Outlook: - Short-term volatility may persist amid COMEX December deliveries. - Fed guidance on 2026 rate paths remains key. - Silver’s leverage to gold suggests higher returns but also greater risk.

The Shanghai Futures Exchange raised margins and widened price limits for silver contracts to curb excessive speculation. Gu Fengda of Guosen Futures called the move a "clear signal" to stabilize markets.