After three consecutive rate cuts by the Federal Reserve, internal disagreements erupted: 3 members voted against, and next year there may be only one rate cut.

【Chainwen】The Federal Reserve has cut interest rates again, but this time it’s a bit different.

On the evening of December 10, the Federal Reserve cut the benchmark interest rate by 25 basis points, from the 4% range to 3.5%-3.75%. Including this cut, it has been reduced three times in a row, with a total decrease of 75 basis points. Logically, this is good news, but there was an uproar within the committee—3 members voted against the decision! This is the first time such a scene has occurred since September 2019.

Board member Milan dissenting for the third consecutive time (his term expires in January next year), and Schmied also voted no for the second time. The significant disagreements indicate that the decision-makers do not have a unified view on the economic outlook.

The statement mentioned that the economy is still expanding moderately, but the job market has noticeably cooled—job creation has slowed this year, and the unemployment rate has been rising since before September. Recent data also confirmed this trend.

More importantly, the “dot plot” revealed signals: interest rates may only be cut once in 2026, then once more in 2027, after which rates will stabilize around 3%. This forecast is identical to the September version, but the chart exposes the considerable disagreement within the committee regarding the interest rate path.

Additionally, the Federal Reserve announced it will restart its Treasury bond purchase program. Cutting rates while injecting liquidity, the operations are becoming increasingly subtle.