As the global economy faces multiple uncertainties and the recent crisis of the U.S. government "shutdown" has just been resolved, debates within the Federal Reserve regarding the future direction of monetary policy have intensified. On November 11, 2025, Federal Reserve Governor Milan publicly called for a 50 basis point rate cut in December, citing a softening labor market and declining inflation, and even suggested that a 25 basis point cut would be the "minimum appropriate action." However, other officials such as Musalem, Daly, and Williams expressed a more cautious stance, believing that further rate cuts may be limited or that an open mindset is necessary. This internal divergence raises questions about the sustainability of Bitcoin's rebound following the resolution of the government "shutdown" crisis, with the market closely watching the Federal Reserve's final decision at the December meeting.

1. Intensifying Internal Disagreement on Rate Cuts: The Battle Between Doves and Hawks

Federal Reserve officials have clear differences in their views on the future path of rate cuts, leading to a battle between doves and hawks.

Dovish Voice: Significant Rate Cut of 50 Basis Points On November 11, Federal Reserve Governor Milan stated that given the softening labor market and declining inflation, the Federal Reserve should cut rates by 50 basis points in December. He believes that a 25 basis point cut is the "minimum appropriate action." Milan pointed out that the unemployment rate is rising, "because the policy is too tight. Therefore, we must adjust the policy and continue to gradually lower it to prevent this tightening from putting more pressure on the economy, which would further increase the unemployment rate."

Hawkish Voice: Cautious Rate Cuts or Pause On November 10, Federal Reserve's Musalem indicated that he expects the U.S. economy to rebound strongly early next year, highlighting the need for officials to be cautious about additional rate cuts. He reiterated his view that the current Federal Reserve policy is close to a level that no longer exerts downward pressure on inflation and emphasized that the space for further rate cuts is limited; otherwise, monetary policy would become excessively loose. Federal Reserve Chairman Powell also stated last month that a rate cut in December is not a foregone conclusion. Several officials who spoke since the central bank's October meeting have also pushed for a pause in rate cuts in December, emphasizing the need to curb inflation above the target.

Neutral Voice: Maintaining an Open Mindset On November 10, Federal Reserve's Daly stated that the U.S. economy may be suffering from weak demand, while tariff-related inflation currently seems to be under control. Daly did not specify what actions would be taken at the upcoming December meeting, stating, "To formulate the right policy, we need to maintain an open mindset and delve into the evidence from both sides of the debate."

Economic Resilience and Low-Income Families: On November 10, New York Fed President Williams discussed the decision-making for the December meeting, stating, "The essence of the current situation is that inflation is high and there are currently no signs of a decline, while the economy shows some resilience." Although the U.S. labor market is still "gradually cooling," "there has not been a more severe shift." He pointed out that many low-income families are facing a crisis of affordability, and the so-called "divergent" behavior of American households may become a key factor influencing whether they support the Federal Reserve's rate cut in December.

2. Bitcoin Rebound: Optimism from Government Agreement Boosts, OG Sell-offs and ETF Outflows Coexist

Boosted by optimism from the U.S. government's funding agreement, Bitcoin has returned to $106,000 after several attempts to break below $100,000.

Rebound Momentum: QCP Capital posted on social media that despite ongoing OG (original holder) sell-offs and ETF fund outflows, this rebound has still occurred.

Mixed Options Fund Flows: Buying call butterfly options indicates market optimism, while selling call spread options limits market expectations for new highs this year.

Enhanced Market Depth: Bitcoin's ability to absorb OG supply pressure is similar to past Silk Road and Mt. Gox cycles, reflecting a stronger current market depth.

Decline in DAT Activity: Although DAT (large transaction accounts) activity has decreased, its impact on market sentiment remains crucial. Bitcoin's defense of the $100,000 level has provided breathing space for the U.S. Treasury market, but if Bitcoin's price breaks above $118,000, it may attract a new round of OG sell-offs.

3. Matrixport Analysis: The Game Between Technicals and Macro Catalysts

Matrixport expressed market views, stating that from a technical perspective, this round of pullback has approached a value-for-money range.

Technical Buying: RSI recently dipped to 35, and historically, technical buying tends to become active around this level.

Macro Catalyst Validation: The sustainability of Bitcoin's rebound still awaits validation from macro catalysts. Short-term catalysts include: the U.S. government shutdown is expected to be resolved this week (already resolved), and Trump hinted at possibly issuing about $2,000 in "stimulus checks" to the public, reminiscent of the retail frenzy driven by checks in 2020-2021.

Limited Rebound Strength: Overall judgment indicates that in the context of recent ETF net outflows and institutional cautiousness, the rebound strength is limited; relying solely on the aforementioned catalysts is insufficient to drive a trend reversal, and resonance validation from both the funding and fundamental aspects is still needed.

Conclusion:

The resolution of the U.S. government "shutdown" crisis has brought positive signals to the Bitcoin market, with prices rising above $106,000. However, the internal disagreements within the Federal Reserve regarding the path of rate cuts, along with differing views among officials on inflation, employment, and economic prospects, pose challenges for the Web3 market as it welcomes the return of liquidity while facing policy uncertainties. Factors such as Bitcoin's resilience, OG sell-offs, ETF outflows, and declining DAT activity collectively create a complex picture of the current market. In the future, whether Bitcoin can break through key resistance levels and ignite a new bull market still requires waiting for resonance validation from macro catalysts and funding and fundamental aspects.

Related Reading: The Hong Kong Monetary Authority Releases "Fintech 2030" Strategy, Over 40 Measures Focus on Financial Tokenization

Original Article: “Federal Reserve Governor Calls for 50 Basis Point Rate Cut in December, but Bitcoin (BTC) Rebound's Sustainability Remains Uncertain”

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