The Federal Reserve of the United States, during the meeting of the Federal Open Market Committee (FOMC) held on December 10, 2025, decided to lower the key interest rate by 25 basis points. The new rate range is now 3.5%–3.75%.
This is reported by Finway
Third Consecutive Rate Cut by the Fed in 2025
This marks the third consecutive rate cut since September 2025, indicating a shift towards a more accommodative monetary policy by the Fed. Changes in the interest rate dynamics over the past few months demonstrate the regulator’s gradual transition to supporting economic growth:
The reaction of financial markets has been subdued. The cryptocurrency market, particularly Bitcoin, did not respond with significant growth, as participants had already factored in the likelihood of such a move in their expectations. The price of Bitcoin briefly rose to $94,476 but quickly returned to previous levels:
Experts believe that the slight volatility of high-risk assets can be attributed to the preemptive pricing in of the rate cut in market quotations, thus limiting the impact on prices.
Probability of Further Changes and Comments from the Fed Chair
This meeting was the last for the Fed in 2025. The next meeting is scheduled for the end of January 2026. According to analysts, the likelihood of further rate reductions at the next meeting remains low—less than 20%, according to CME forecasts.
After the announcement, Fed Chair Jerome Powell held a press conference, emphasizing the challenging conditions for decision-making due to the limited data caused by the US government shutdown. Powell stated that the economic situation had not significantly changed since October, but the shutdown negatively impacted economic activity in the fourth quarter. The projected GDP growth for 2025 is expected to be 1.7%, and for 2026—2.3%, which is higher than previous estimates.
Additionally, Powell noted the stability of consumer spending, gradual growth in business investment, weak activity in the housing sector, and low levels of layoffs and hiring. The latest report showed that unemployment continues to rise, and the pace of employment has slowed, likely due to reduced immigration. Inflation, according to the Fed Chair, remains above the target level, but assessing its dynamics is difficult due to the lack of current data.
“Since the rate cut in September 2025, the interest rate has reached a ‘neutral level’, and inflation is expected to continue to decline while employment rises.”
The meeting also decided to begin purchasing short-term Treasury bonds to maintain an adequate level of bank reserves in the long term.
In response to journalists’ questions, Powell emphasized that future changes in the Fed’s monetary policy will depend on new macroeconomic data, particularly regarding employment and the consumer price index. He avoided answering politically charged questions about competition for the Fed Chair position, stressing the regulator’s independence.
Among the factors affecting the current state of the US economy, Powell mentioned the spread of artificial intelligence, which he believes partially explains the increase in economic activity despite the high unemployment rate.