Summary of the Federal Reserve (Fed) meeting held on December 10, 2025, and the subsequent statement:

1. Interest Rate Decision:

• The Fed, in line with expectations, lowered the policy rate by 25 basis points to a range of 3.50% - 3.75%.
• This marks the third consecutive rate cut.

2. Rationale for the Decision (Focus Shift):

• The statement emphasized that the fight against inflation continues, but the focus is gradually shifting toward supporting the labor market.
• Signs of cooling in the labor market emerged as one of the main reasons for the rate cut.

3. Future Outlook (Dot Plot / Dot Plot):

• 2026 Projection: The median expectation of Fed members is that only one more 25 basis point cut will be made in 2026. (The policy rate is expected to be in the range of 3.25% - 3.50% by the end of 2026).

• This indicates that the Fed prefers a more cautious and gradual easing process compared to more aggressive market expectations for cuts, showing a "dovish stance" ("dovish cut").

4. Economic Outlook:

• Growth (GDP) revisions are limited to the upside, signaling that the economy remains resilient.
• While inflation is moving toward the target, it has not yet been fully controlled; the Fed reiterated that it will act "data-dependent" (data-dependent).

In summary, the Fed aims to lower inflation without pushing the economy into recession, gradually easing off the brakes while hesitating to accelerate the gas pedal.

Compared to the September meeting, it adopted a more hawkish stance.