---
type: "Topics"
locale: "en"
url: "https://longbridge.com/en/topics/100000000902431.md"
description: "The Federal Reserve's modern monetary policy cycle is actually focused on rate cuts, not rate hikes.Unless an unprecedented resurgence of inflation forces an abrupt reversal, the debate on "Fed Night" is typically over the pace and scale of rate reductions (e.g., 25 bps vs. 50 bps) or whether the committee chooses to hold.Here is what drives the current dynamic: * Policy Direction: The aggressive 2022–2023 rate hike campaign concluded after taking the federal funds target range to 5.25%–5.50%. The current cycle shifted toward easing as inflation cooled from multi-decade highs. * Key Focus Areas: Rather than preparing for hikes, markets monitor whether labor market softening justifies accelerated cuts or if sticky service inflation requires holding rates higher for longer. * The "Fed Night" Watchlist:   * FOMC Statement & Target Range: The immediate decision on the federal funds rate.   * Summary of Economic Projections (SEP / "Dot Plot"): Where policymakers expect the terminal rate to settle over the next 1–3 years.* Press Conference: Chair Powell’s commentary regarding the balance of risks between unemployment and inflation."
datetime: "2026-09-16T12:49:27.000Z"
locales:
  - [en](https://longbridge.com/en/topics/100000000902431.md)
  - [zh-CN](https://longbridge.com/zh-CN/topics/100000000902431.md)
  - [zh-HK](https://longbridge.com/zh-HK/topics/100000000902431.md)
author: "[Jaces](https://longbridge.com/en/profiles/25456587.md)"
generator: "portal-rs"
---

# The Federal Reserve's modern monetary policy cycle…


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> **Disclaimer: This article is for reference only and does not constitute any investment advice.**