The US Federal Open Market Committee cut the Fed fund rate by 25-basis points this past week, the third cut made during 2025.
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While the US dollar index has weakened, it did so before the three cuts were made, holding steady since.
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As expected, the US Federal Open Market Committee (FOMC) cut the Fed fund rate by another 25-basis points at the conclusion of the December 2025 meeting (Wednesday, December 10), with much of the post-announcement discussion focusing on the language used by Fed Chairman Jerome Powell regarding the outlook for futures FOMC moves. To summarize, there is still concern over the US labor market (the latest weekly jobless claims came in at 236,000 as compared to an expected 223,000 and the previous week’s 192,000) and inflation (next Thursday, December 18, will see the release of the November Consumer Price Index). Chairman Powell indicated one cut is possible during 2026 with another in 2027, though the Fed fund futures forward curve showed the market projecting two cuts next year. We’ll see what happens.
