Fed policymakers signal a 25 basis point cut for 2026
Istanbul, 11 December (Hibya) – Policymakers at the U.S. Federal Reserve (Fed) left their federal funds rate projections unchanged from September and signaled only a 25 basis point cut in 2026.
The Fed, in line with expectations, lowered the federal funds rate by 25 basis points at its December 2025 meeting, bringing it down to the 3.5–3.75 percent range following similar cuts in September and October.
With this cut, borrowing costs fell to their lowest level since 2022. The committee remained divided, with three members continuing to vote against the reduction.
This level of division had not been seen since September 2019. While Austan Goolsbee and Jeffrey Schmid advocated keeping rates unchanged, Stephen Miran pushed for a deeper, 50 basis point cut.
On the GDP front, the Fed revised its growth projections upward, forecasting 1.7 percent for 2025 (up from 1.6 percent) and 2.3 percent for 2026 (up from 1.8 percent).
Personal Consumption Expenditures (PCE) inflation is expected to be slightly lower—2.9 percent this year (previously 3.0 percent) and 2.4 percent next year (previously 2.6 percent). Unemployment rate forecasts remain unchanged at 4.5 percent for 2025 and 4.4 percent for 2026.
Usa News Agency
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