Financial News: Fed Cuts Rates For Third Straight Meeting But

Fed Cuts Rates For Third Straight Meeting But Signals Differing Views About Outlook

12/10/2025 - 14:33:00 (RTTNews)

(RTTNews) - The Federal Reserve on Wednesday announced its widely expected decision to cut interest rates by another quarter point, matching the rate cuts seen in September and October.

The Fed said it decided to lower the target range for the federal funds rate by 25 basis points to 3.50 to 3.75 percent.

While a majority of Fed officials voted to cut rates by another quarter point, three cast dissenting votes for the first time since September 2019.

Fed Governor Stephen Miran preferred lowering rates by 50 basis points, while Chicago Fed President Austan Goolsbee and Kansas City Fed President Jeffrey Schmid preferred to leave rates unchanged.

The central bank's latest summary of economic projections also showed significant divisions about the outlook for rates.

The forecast for rates at the end of 2026 was unchanged from September at a range of 3.25 to 3.50 percent, suggesting just one more quarter point rate cut next year.

However, the closely watched "dot plot" of individual officials' expectations showed widely divergent views, with one official forecasting rates at a range of just 2.0 to 2.25 percent by the end of 2026 and some predicting higher rates.

The divided views among Fed officials come as the central bank seeks to balance its dual goals of achieving maximum employment and inflation at the rate of 2 percent over the longer run.

The Fed said it judges that downside risks to employment have risen in recent months while also noting inflation has moved up since earlier in the year and remains somewhat elevated.

"In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks," the Fed said.

The Fed's next monetary policy meeting is scheduled for January 27-28, with CME Group's FedWatch Tool currently indicating a 73.4 percent chance the central bank will leave rates unchanged.

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