Overview
- The Federal Reserve lowered the federal funds rate by 25 basis points to 3.50%–3.75%, the lowest in nearly three years.
- The vote revealed deep divisions, with three dissents: Stephen Miran favored a 50-basis-point cut, while Austan Goolsbee and Jeffrey Schmid preferred no change.
- The policy statement revived language that the committee will carefully assess incoming data, and projections point to a median expectation of just one further quarter-point cut in 2026.
- The decision was made with limited recent official readings on jobs and inflation due to a 43‑day federal government shutdown, with key reports expected before the late‑January meeting.
- Projections show growth strengthening and inflation easing toward roughly 2.4% by end‑2026, as political attention rises over President Trump’s pending nomination of a successor to Chair Jerome Powell, whose term ends in May.