Jerome Powell, Chair of the Fed, after the December 10, 2025 meeting, where interest rates were cut by 0.25 points to the range of 3.5%-3.75%, describing it as a "plausible" level for the neutral rate, estimated around 3%.

This is the third consecutive cut this year, responding to a stable labor market and declining inflation, although Powell highlights downside risks to employment and upside risks to prices, with limited data due to the recent government shutdown.

The implication is a more cautious monetary policy in 2026, with projections of only one additional cut, which could temper the momentum in stock and bond markets as rates approach economic equilibrium.