10 December 2025 | 2:46PM EST Economics Research USA: FOMC Lowers Fed Funds Rate by 25bp; Two Hawkish Dissents and One Dovish Dissent; SEP Median Dot Unchanged, With Six Hawkish BOTTOM LINE: The FOMC lowered the target range for the fed funds rate by 25bp to 3.50-3.75% at its December meeting. Kansas City Fed President Schmid, Chicago Fed President Goolsbee, and Governor Miran dissented from the Committee's decision, with Schmid and Goolsbee preferring not to cut and Miran preferring a 50bp cut. The Committ ...

Group 1 - The FOMC is likely to lower the policy interest rate by 25 basis points to a range of 3.50%–3.75% during the meeting on December 10, due to high downside risks to achieving full employment [2][4][20] - The economic projections are expected to show limited changes, with the median dot plot indicating only one 25 basis point cut in 2026 and one in 2027, while long-term rates are projected to remain at 3.0% [2][11][21] - There is a significant division within the committee, with at least two hawkish votes expected against the rate cut, indicating a cautious approach to future monetary policy adjustments [6][18][21] Group 2 - The upcoming FOMC meeting is anticipated to emphasize a more hawkish stance in the forward guidance, suggesting that further rate cuts may be paused [4][14][21] - The labor market data, including rising unemployment rates and layoffs, will play a crucial role in determining future rate cuts, with expectations of the unemployment rate exceeding 4.5% by year-end [7][8][19] - The committee may signal a cautious approach to future rate adjustments, with Powell likely to communicate that any further changes will depend on upcoming labor and inflation data [18][21]

17 September 2025 | 2:44PM EDT USA: FOMC Lowers Fed Funds Rate 25bp; SEP Median Projects Three Cuts for 2025, One Each in 2026 and 2027 BOTTOM LINE: The FOMC lowered the target range for the fed funds rate by 25bp to 4-4.25% at its September meeting. The post-meeting statement noted that "downside risks to employment have risen" even as inflation "has moved up." The Committee removed a previous reference to "the extent and timing" of additional fed funds rate cuts in the forward guidance portion of the stat ...

Core Viewpoint - The Federal Reserve is expected to maintain the federal funds rate target range at 4.25%-4.50% during the June meeting, marking the fourth consecutive time it has held rates steady. However, uncertainties regarding the policy path for the second half of the year are significant, making the upcoming "dot plot" and economic outlook from the Fed crucial for market reactions [1][4][5]. Interest Rate Projections - Market expectations indicate that the Fed may lower rates twice in 2025, with a potential first cut in September or October [1][2]. - The "dot plot" is anticipated to be more significant than the decision itself, with analysts focusing on whether it will signal only one rate cut instead of two for 2025 [1][8]. Economic Forecast Adjustments - Analysts predict that the Fed will lower its GDP growth forecast for 2025 to 0.9%, down from 1.7% previously, while raising the core PCE inflation forecast to 3.3% from 2.8% [7]. - The unemployment rate forecast is also expected to rise to 4.5%, compared to the previous estimate of 4.4% [7]. Inflation and Economic Data - Recent geopolitical tensions have increased oil prices, potentially impacting inflation expectations, but analysts believe this will have limited effect on the Fed's June meeting [4]. - The core PCE inflation rate, which has decreased from a peak of 5.6% in 2022 to 2.5%, is projected to rebound to 3.4% by year-end [5]. Market Reactions and Predictions - If the "dot plot" indicates only one rate cut, it may lead to significant market volatility, potentially strengthening the dollar and putting pressure on gold and other assets [10][11]. - The market has largely ignored the resilience of U.S. economic data, focusing instead on potential downside risks, which may affect the dollar's performance in the context of global "de-dollarization" [11].