The Fed delivers a rare ‘hawkish cut’ as Powell tries to steady a softening job market

Federal Reserve Bank Chair Jerome Powell speaks during the George P. Shultz Memorial Lecture Series at Stanford University on December 01, 2025 in Stanford, California. (Credit: Justin Sullivan—Getty Images)

The Federal Reserve cut rates for a third straight meeting on Wednesday in what analysts call a “hawkish” move: an attempt to support a softening labor market while signaling reluctance to keep cutting.

The move was widely anticipated, but the tone was not. Officials paired it with firmer language about the “extent and timing” of additional adjustments, phrasing that, in what economists call Fed-speak, raises the bar for further cuts and underscores the committee’s unease about inflation, which the statement noted has “moved up” and “remains somewhat elevated.”