FOMC Cuts 25 Basis Points to 3.50%-3.75%, Three Dissents; Markets See 55 Basis Points Next Year

The FOMC cut rates by 25 basis points to 3.50%-3.75% on Dec. 11, its third consecutive reduction, with three dissenting votes highlighting a widening split, BlockBeats reports. The statement added language about considering the extent and timing of further adjustments and removed the description of unemployment as lower. Beginning Dec. 12, the Federal Reserve will purchase $40 billion of Treasury bills within 30 days, and Jerome Powell said policy is near the upper bound of the neutral range, that no one expects additional hikes, that inflation's upside risks are mainly driven by tariffs which, if reversed, could bring inflation toward the lower end of the 2% range, and that recent labor data were overstated with employment facing downside risk. Markets lifted expectations for cumulative easing next year to 55 basis points, with the probability of a January cut still below 25%, while major institutions diverged on timing, including views of cuts from March, a January pause and a watchful first half, or delays until after June. A Bitunix analyst said that with an unclear easing pace, intensifying internal divisions and potential 2026 leadership changes, policy-path pricing will rely more on data and liquidity operations, near-term volatility could increase, and clearer employment and inflation signals are needed.