2025-12-31 03:36:58

🌎🌍🌏 FED SHOWS SIGNS OF FRACTURE: RATE CUT AS EXPECTED, BUT FAR FROM STRAIGHTFORWARD

The December meeting minutes released last night reveal that the Federal Reserve’s rate cut decision was far more contentious than the market initially assumed.

Federal Reserve voted 9–3 to cut rates by 25 bps, bringing the policy rate to 3.5%–3.75%. Even members who supported the cut admitted the decision was finely balanced, and keeping rates unchanged was a real possibility.

Core tension within the Fed:
One camp prioritizes supporting the labor market
The other remains concerned that inflation has not yet returned to the 2% target

The dot plot underscores the Fed’s highly cautious stance: only one rate cut projected in 2026 and one in 2027, with the long-term policy rate hovering around 3%.

👉 Bottom line: the Fed has cut rates, but it has not pivoted toward aggressive easing. The message remains one of gradualism and tight control, fully consistent with what Jerome Powell had previously signaled.

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