When markets ignore the Fed: the strange behavior of assets after the rate cut

On December 11, 2025, the Federal Reserve officially cut the federal funds rate range by 25 basis points, bringing it to 3.5%-3.75%. This is the third monetary easing intervention of the year, continuing the series of cuts that began in September 2024. However, the move that traditionally would have stimulated risky assets triggered a surprisingly fragmented and contradictory market reaction.

A unanimous decision… not quite

The Federal Reserve's announcement confirmed market expectations, but with a notable detail: three committee members voted against. This is the highest number of dissenters since September 2019. One member even proposed a more aggressive 50 basis point cut, while two others supported keeping rates unchanged. This internal split signals growing tensions within the institution regarding the future direction of monetary policy.

The official statement attributed the cut mainly to signals of weakening the labor market. U.S. economic activity continues to expand, but job creation is slowing down. Inflation remains at relatively high levels, a contradiction that has raised some concerns in the market.

According to the Fed's dot plot, only one additional cut is expected in 2026. However, analysts warn that this scenario could change radically if the new chair of the institution adopts a more flexible stance compared to incumbent Powell.

Treasuries betray expectations

When the central bank eases monetary policy, bond yields should fall. Instead, this time the opposite happened: the yield on 10-year U.S. Treasuries rose from the announcement, reaching 4.17% on December 9, the highest level since September. 30-year Treasuries touched 4.82%.

This behavior represents a rare anomaly, almost unprecedented in the last three decades. The market has offered three competing interpretations. Optimists see the rise as proof of confidence that economic growth will not collapse. Neutral observers consider it simply a return to pre-2008 normality. Pessimists, on the other hand, interpret it as a “punishment” by credit vigilantes against U.S. fiscal chaos.

JPMorgan strategists identified two key factors: the market had already priced in the effects of easing in advance, and the Fed chose to cut rates even when inflation remains high, thus prolonging economic expansion rather than containing it.

Silver: when forecasts materialize

While Treasuries remained steady, the silver market made an extraordinary leap. The spot price surpassed $64 per ounce on December 12, setting a new all-time record. Despite these highly bullish forecasts, the metal has already gained 112% since the start of the year, almost double that of gold.

Behind this movement are very concrete structural factors. First, the rate cut reduced the opportunity cost of holding non-yielding assets. Second, the U.S. has included silver in the list of critical raw materials, fueling fears of future trade restrictions. But the most relevant driver is the persistent supply deficit: the silver market has recorded a deficit for the fifth consecutive year, with forecasts indicating a global shortfall between 100 and 118 million ounces in 2025.

Industrial demand is the foundation of this rally. The photovoltaic sector alone is expected to absorb 55% of global silver demand, and the International Energy Agency estimates that by 2030, solar will increase annual demand by about 150 million ounces.

Gold: challenged by opposing forces

Gold reacted with moderation compared to silver. After the announcement, COMEX gold futures rose 0.52% to $4,258.30 per ounce. Gold ETFs showed slight movements: the world's largest fund, SPDR, held about 1,049.11 tons, slightly below October's peak but still up 20.5% year-over-year.

Stability comes from central bank purchases. In Q3 2025, global purchases reached 220 tons, a 28% quarterly increase. The Chinese central bank continued its buying streak for the thirteenth consecutive month.

Gold prices oscillate between two forces: support from Fed easing and pressure from potential reductions in geopolitical tensions and declining speculative demand.

Bitcoin: when rate cuts don't help

While gold reacted calmly and silver with euphoria, Bitcoin showed surprising coldness. After the Fed's decision, the price briefly rose to $94,500 before collapsing toward $92,000. According to available data, BTC is currently at $95.47K, down 1.25% in 24 hours.

Massive liquidations occurred: in one day, the total value of liquidated contracts exceeded $300 million, involving over 114,600 traders. This reaction contradicts the conventional expectation that Bitcoin should benefit from monetary easing.

Analysts highlight how Bitcoin is in a phase of clear decoupling from other markets. Despite large players like MicroStrategy continuing to accumulate, structural selling pressure remains strong. Standard Chartered has drastically revised its forecasts, lowering the end-of-2025 target from 200,000 to around 100,000 dollars, hypothesizing that major investors may have completed their buying cycle.

The real message: monetary policy alone is no longer enough

The divergence in asset behaviors reveals a deeper lesson: markets no longer respond as they used to to simple monetary policy signals. Uncertainty about the Fed's future trajectory is one of the main culprits.

The Fed's growth projections for 2025-2028 have been revised upward, with the forecast for 2026 rising from 1.8% to 2.3%. However, this apparent clarity masks increasing disagreements within the institution about the future direction.

Even more significant is the rising market anxiety regarding the Fed's independence. Former President Trump repeatedly criticized the pace of rate cuts, stating they should be doubled. If the next Fed chair is perceived as more “dovish,” market confidence in the institution's autonomy could suffer further.

Within 24 hours of the announcement, silver futures recorded an annual increase of 109%, while the 10-year Treasury yield hit its quarterly high. When the usual Fed stimulus signals produce such heterogeneous and even contradictory effects, the message is clear: monetary expansion alone no longer dominates the complexity of price formation in this phase of the cycle.

With the Federal Reserve leadership change on the horizon and economic data continuing to surprise, 2026 promises to be a year full of “unconventional” challenges. Only investors capable of identifying the true drivers of each asset class will be able to navigate this new market fragmentation dynamic.