Overview
- Policymakers lowered the federal funds rate by 25 basis points to 3.50%–3.75% in a 9–3 vote, with two presidents favoring no cut and Governor Stephen Miran seeking a half‑point reduction.
- Most participants said additional cuts would likely be appropriate only if inflation continues to decline, while several warned that further easing could be seen as weakening the 2% inflation commitment.
- A few supporters called the decision finely balanced, and officials stressed assessment challenges from shutdown‑related data gaps as recent reports showed CPI near 2.7%, unemployment around 4.6% and Q3 GDP at 4.3%.
- Investors largely expect the FOMC to hold rates at the Jan. 27–28 meeting as the committee waits for early‑January jobs and inflation readings.
- The Fed resumed short‑term Treasury bill purchases of about $40 billion per month to maintain reserves, and a 2026 rotation of voting regional presidents adds uncertainty to the policy outlook.