Welcome back to The Breakdown with me, NLW.

It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world.

What's going on, guys? It is Thursday, September 19th, and today, you better believe, we are talking

about that jumbo rate cut. Before we get into that, however, if you are enjoying the breakdown,

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Well, friends, after more than a year of holding rates high, the Federal Reserve has delivered their first rate cut. For the past month, it's been clear the cutting cycle would begin at this

FOMC meeting. The question then was how large the cut would be. Sure enough, when push came to

shove, the Fed kicked off the

easing cycle with a jumbo-sized 50 basis point cut. The last time the first rate cut was larger

than normal was in September 2007, as the first dominoes began to fall in the global financial

crisis. The Fed funds rate is now in a range between 4.75 and 5%. Chair Jerome Powell went to pains in order to frame these cuts as completely normal and no reason for alarm.

Presenting the rate decision, he said it, quote, reflects our growing confidence that, with an appropriate recalibration of our policy stance,

strength in the labor market can be maintained in a context of moderate growth and inflation moving sustainably down to 2%.

There always seems to be a word with each Fed meeting, and this Fed meeting's word of the day

was recalibration. Powell explained the Fed's intention was to slowly recalibrate rates out of

restrictive territory. Part of the language decision was coming from the fact that many had been

concerned that a double cut would spook markets, with traders

wondering if the Fed knew something that they didn't. Powell made it clear that the only thing

that he's seen is that rates are too high to allow for a strong economy, and it's now appropriate

to bring them down. In other words, he used the language of a soft landing even if those words

specifically were not used. The cuts were presented as policy normalization rather than

...