The Fed went the cautious route on Wednesday with a 25bps rate cut, a restrained (and some might say defiant) move that risked upsetting market hopes for a repeat of last September’s half-point reduction, to say nothing of a US president all out of patience with a monetary authority he views as intolerably insubordinate.

Say what you will about Jerome Powell, but unlike Congress he’s proven a jealous guardian of his institution’s purview. Notably, Chris Waller and Miki Bowman joined their fellows in voting for the 25bps move. Only Stephen Miran, voting just 48 hours after a slapdash Senate confirmation, dissented in favor of a larger cut.

The median 2025 dot was marked to market to reflect 50bps of additional easing this year, or 75bps total including Wednesday’s cut. That’s dovish, but nowhere near enough to placate Donald Trump, who earlier this week said he expected a “big” move today.

The 2026 median dot reflects just one cut for all of next year and the long run dot was unchanged at 3%. So, the “median” Fed official expects policy rates to remain moderately restrictive through the midterms.

The 2027 dot shifted lower to 3.1% from 3.4% in June, suggesting a return to neutral in two years’ time. To say that’s insufficient vis-à-vis The White House’s determination to bring down rates rapidly would be an understatement, and not a small one.

In the statement, the Fed described job gains as having “slowed.” That constituted a downgrade from the description on offer in July, when labor market conditions “remain[ed] solid.” The subjective assessment of the broader economy was unchanged, as was the description of inflation as remaining “somewhat elevated.”

As for the balance of risks, the Fed alluded to the notion that labor market downside now outweighs concerns around rekindled inflation for the purposes of setting policy, tariffs aside. That concern (about the asymmetry towards a softer labor market) was appended to the perfunctory language around staying “attentive” to both sides of the dual mandate.

In the SEP, the growth outlook was marked up for this year and next. The US economy’s seen expanding 1.6% in 2025 and 1.8% in 2026. The core PCE projections were 3.1% for 2025 and 2.6% for 2026, with the latter representing an upward bump. The unemployment rate forecasts were 4.5% for this year and 4.4% for 2026. Those projections were both 4.5% three months ago.

All in all, I’d call this the Fed’s last stand. The 25bps cut and the fact that Waller and Bowman didn’t dissent for more with Miran, constituted pushback against The White House. The three 2025 cuts tipped by the dot plot didn’t necessarily represent a capitulation to political pressure. Again: That’s just marking to what the market already expected and to reiterate, the 2026 dot is 50bps to the hawkish side of market pricing.

The emphasis on labor market risks will be interpreted, correctly, by markets as a dovish nod. But I’d caution that in the context of a dot plot which only tipped one 2026 cut, it’d be a mistake to read too much into what, ultimately, is just a statement of fact: Job gains are slowing.

Of course, none of this really matters. Powell’s a lame duck. And Lisa Cook will probably lose her seat if John Roberts’s wholesale deference to Trump in 2025’s anything to go by. The Fed, like America itself, is Trump’s now.

Even if the Supreme Court ultimately allows Cook to keep her Board seat (and assuming Trump accepts and abides by any such SCOTUS ruling), and Powell manages to stay on in the big seat until his term expires in May (not especially likely in my judgment), the Fed’s lost. Trump’s pressure campaign will continue for the duration of his second term. And into his third.