December 2025: the Fed's third cut, and a split that did not heal
The quarter-point cut was the last of the year. Three officials voted against it, and the committee signaled it was close to done.
Kivorent News desk, published , 1 min read
This is a look back at an event from . We wrote it on November 11, 2026, from the sources listed at the end.
What to know
- The Federal Reserve cut its benchmark rate by a quarter point on December 10, 2025, its third cut in a row.
- Three officials dissented.
- The Fed's projections showed one cut in 2026. As it turned out, the next move was up.
The Federal Reserve ended 2025 by lowering interest rates for the third meeting in a row. On December 10 it cut its benchmark rate by a quarter of a percentage point, to a range of 3.50% to 3.75%.
A divided vote
Three officials dissented, an unusually large number for a committee that prizes consensus. Semafor reported that the Fed's own projections pointed to just one more cut in 2026, and that Chair Jerome Powell set a high bar for going further.
The disagreement reflected a real dilemma. The job market had been weakening, which argues for lower rates. Inflation was still above the Fed's 2% target, which argues against them.
What happened next
The December range held for most of the following year. Looking back from November 2026, the path went like this:
| Meeting | Decision |
|---|---|
| December 10, 2025 | Cut to 3.50% to 3.75% |
| April 29, 2026 | Held, in an 8 to 4 vote |
| September 2026 | Raised, the first increase in three years |
| October 28, 2026 | Held, with two officials voting for another increase |
The single cut projected for 2026 never came. Higher energy prices pushed inflation up, Powell's term as chair ended in May, and his successor, Kevin Warsh, presided over a rate increase by the autumn.
We cover the later decisions in the Fed's most divided vote since 1992 and the October 2026 hold.
Why it mattered
Rate decisions set the cost of mortgages, car loans and business borrowing, and they move stock and bond prices. The December 2025 meeting is a reminder that the Fed's projections are a snapshot of what officials expect on the day. They are not a commitment, and a year is long enough for the direction to reverse.
This article is general information. It is not investment advice, and trading involves the risk of losing money.
Sources
- The US Fed delivers a third consecutive interest rate cut, Semafor, December 10, 2025
- Fed holds rates steady, cites elevated inflation, Reuters, republished by GV Wire, April 29, 2026
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