US Fed Rate Cut Highlights: Fed cut driven by rising job risks, inflation pressures tilted to upside, says Jerome Powell

US Fed Rate Cut Highlights: Wall Street rises following Fed cut

The S&P 500 gained 0.4%, moving closer to its October record, while the Dow climbed 386 points, or 0.8%. The Nasdaq composite posted a modest 0.1% rise.

US Fed Rate Cut Highlights: Overshooting inflation target is mostly due to tariffs, says Jerom Powell

Powell also said the current overshooting of the central bank's 2% inflation target is mostly the result of Trump's import tax hikes.

"It's really tariffs that are causing the most of the inflation overshoot," Powell said, reiterating his expectation the tariff impact on inflation is likely to be a "one-time price increase."

US Fed Rate Cut Live: Goods inflation from tariffs should peak in first quarter, says Jerome Powell

Asked if he sees consumer price increases from tariffs tapering off in the coming months, Powell said it will take "quite a while for an individual tariff to take its full effect."

"Let's assume there are no major new tariff announcements, inflation from goods should peak in the first quarter or so," he said. "You know, we haven't been able to predict this with any precision. No one is."

"But call it the first quarter or so of next year should be the peak, and from here ... it shouldn't be big. It should be a couple tenths or even less than that."

US Fed Rate Cut Live: Powell says high living costs reflect past inflation, urges strong wage gains as Fed targets 2%

Federal Reserve Chair Jerome Powell said Americans’ struggles with high living costs stem largely from the elevated inflation experienced in 2022 and 2023 rather than today’s slower price increases. He emphasized that the Fed’s priority is to bring inflation back to its 2% target while maintaining a strong labour market with rising real wages.

Powell said households will need “several years” in which wage growth outpaces inflation for affordability to improve, adding that the Fed is focused on keeping inflation in check while supporting job growth and stronger earnings so that people “feel economically healthy again.”

US Fed Rate Cut Live: Some data may be 'distorted' due to shutdown, says Jerome Powell

On coming data, Powell warned that some may be "distorted" because of the government shutdown that affected collection in October and half of November.

"We're going to need to be careful in assessing, particularly the household survey data. They are very technical reasons about the way data are collected in some of these measures ... data may be distorted, and not just sort of more volatile, but distorted."

"So we're going to get data, but we're going to have to look at it carefully and with a somewhat skeptical eye by the time of the January meeting."

US Fed Rate Cut Live: Powell says Fed aiming for neutral policy as inflation–jobs tension creates 'Unique' challenge

Federal Reserve Chair Jerome Powell said the current policy environment is “unique,” marked by unusual tension between the Fed’s inflation and employment goals—something he said he has not seen in his time at the central bank.

Reflecting on past cycles, including the three rate cuts in 2019, Powell stressed that today’s circumstances are distinct and require a “balanced approach” under the Fed’s framework, which guides policymakers to assess how far inflation and employment have deviated from target and how long each would take to return to goal.

He said that when both objectives are “equally at risk,” policy should move toward neutrality rather than favouring either tightening or accommodation. Powell noted that the Fed has been shifting toward a neutral stance and now sees rates within or at the upper end of the neutral range. While the Fed delivered three consecutive cuts in recent meetings, he said no decision has been made about the January meeting and that policymakers are “well positioned to wait and see how the economy performs.”

US Fed Rate Cut Live: It's not like the normal situation where everyone agrees, says Jerome Powell

Powell, speaking on the three dissents in Wednesday's vote, said the Federal Open Market Committee agrees on one thing:

"Interestingly, everyone around the table at the FOMC agrees that inflation is too high, and we want it to come down and agrees that the labor market has softened and that there's further risk," he said.

"Where the difference is, how do you weight those risks?" he continued, adding it's "very unusual" to have persistent tension between the two parts of the mandate.

"The discussions we have are as good as any we've had in my 14 years at the Fed. They're very thoughtful, respectful and you just have people who have strong views."

"We made a decision today. We had, you know, nine out of 12 supported it. So fairly broad support. But it's not like the normal situation where everyone agrees on the direction and what to do."

US Fed Rate Cut Live: Powell says Fed officials split between holding rates steady and pursuing modest cuts

Federal Reserve Chair Jerome Powell said policymakers are divided over the path forward for interest rates, with some officials believing policy should pause at current levels while others see room for one or more cuts later this year or next.

He noted that when FOMC members submit their policy projections, the estimates generally reflect either holding rates where they are or reducing them slightly, underscoring a preference for only limited easing ahead.

US Fed Rate Cut Live: 'We'll carefully evaluate' incoming data, Powell says

The first focused on if the phrase "considering the extent and timing of additional adjustments" indicates a pause in cuts.

"That new language points out that we'll carefully evaluate that incoming data," Powell said.

"And also, I would note that having reduced our policy rate by 75 basis points since September and 175 basis points since last September, the Fed funds rate is now within a broad range of estimates of its neutral value, and we are well positioned to wait to see how the economy evolves."

US Fed Rate Cut Live: Jerome Powell says stronger productivity allows faster growth, notes FOMC split on balancing risks

Federal Reserve Chair Jerome Powell said US productivity has been “structurally higher” in recent years, suggesting the economy can sustain faster growth without requiring additional job creation if productivity continues rising at roughly 2% annually. He added that while all members of the Federal Open Market Committee agree that inflation remains too high and that the labour market has softened with rising risks, the differences within the committee stem from how each policymaker weighs those risks and how their individual forecasts shape policy preferences.

US Fed Rate Cut Live: Jerome Powell says Fed funds rate now near neutral after aggressive cuts

Federal Reserve Chair Jerome Powell said the central bank’s recent round of rate reductions — 75 basis points in September and 175 basis points since last year — has brought the federal funds rate into a broad range of estimates of its neutral level. With policy now closer to neutral, Powell said the Fed is “well positioned” to pause and assess how economic conditions unfold before determining any further adjustment

US Fed Rate Cut Live: Jerome Powell says Fed to buy short-term treasuries to maintain ample reserves, policy now near neutral

Federal Reserve Chair Jerome Powell said the central bank will begin purchasing short-term Treasury securities, mainly Treasury bills, after determining that reserve balances have fallen to “ample levels” amid continued tightening in money market rates and other signs of shifting reserve conditions.

He stressed that the purchases are intended solely to maintain sufficient reserves over time, not to signal a change in monetary policy stance. Powell added that the rate adjustments made since September have now brought policy into a broad range of estimates of neutral, and said the Fed is “well positioned” to assess the need for any further changes based on incoming data, the economic outlook and the balance of risks.

US Fed Rate Cut Live: Fed cut driven by rising job risks, inflation pressures tilted to upside, says Jerome Powell

Federal Reserve Chair Jerome Powell said the central bank faces a “challenging situation” as near-term risks remain skewed toward higher inflation while risks to employment have increased, leaving no “risk-free path” for policymakers.

Powell noted that tariff-driven inflation pressures are likely to be temporary, calling them a one-time shift in the price level, but stressed the Fed’s responsibility to ensure they do not evolve into an ongoing inflation problem. With downside risks to employment rising in recent months, he said the balance of risks has shifted, prompting the Federal Open Market Committee to lower the policy rate by 25 basis points at its meeting.

With this move, the Fed has reduced rates by three-quarters of a percentage point over the last three meetings, which Powell said should help stabilise the labour market while allowing inflation to continue easing toward the 2% target once tariff effects fade. He added that the cumulative adjustments since September place policy within a “plausible” range of neutral, positioning the Fed to assess future moves based on incoming data and the evolving outlook.

US Fed Rate Cut Live: Shutdown weighed on growth, labour market cooling as inflation holds at 2.8%, says Jerome Powell

Federal Reserve Chair Jerome Powell said the recent federal government shutdown has likely dampened economic activity in the current quarter, though he expects those effects to be “mostly offset” by a rebound next quarter as operations resume.

With official employment data for October and November delayed, Powell noted that available indicators point to low levels of both layoffs and hiring, alongside declining perceptions of job availability among households and easing reports of hiring difficulty from firms. He said the slowdown partly reflects weaker labour force growth, driven by lower immigration and participation, though labour demand has softened as well.

Powell added that little new inflation data has been released since October, but the latest readings show total and core PCE inflation both rising 2.8% over the 12 months to September — higher than earlier in the year due to a pickup in goods inflation linked to tariffs.

US Fed Rate Cut Live: Economy growing moderately, housing weak; inflation still a concern, says Jerome Powell

Federal Reserve Chair Jerome Powell said the overall outlook for employment and inflation remains largely unchanged despite the absence of key federal data releases in recent months, citing public and private indicators that point to a gradually cooling labour market and inflation that “remains somewhat elevated.”

Powell added that the Fed has decided to begin purchasing short-term Treasury securities to ensure an ample supply of reserves and maintain effective control of its policy rate. He noted that available data suggest the U.S. economy continues to expand at a moderate pace, supported by solid consumer spending and ongoing growth in business fixed investment, while the housing sector remains weak.

US Fed Rate Cut Live: Three Dissent as Fed Cuts Rates, Citing Rising Employment Risks

The Fed penciled in at least one more rate reduction next year, and flagged heightened risks to employment as it announced Wednesday's move. But a rift within the central bank deepened with three officials voting against the modest reduction. Chicago Fed president Austan Goolsbee and Kansas City Fed president Jeffrey Schmid instead sought to keep rates unchanged. Fed Governor Stephen Miran backed a bigger, half-percentage-point cut.

US Fed Rate Cut Live: 2026 dot plot reveals strong divide on rate cut outlook

The US Federal Reserve's Federal Open Market Committee (FOMC), in its December 10th meeting, trimmed the key lending rate by 25 basis points. However in 2026, the central bank expects to continue on its path of easing, as indicated by the dot plot. Read More

US Fed Rate Cut Live: US interest rate futures price in 78% chance of pause in January

That's compared to 70% before the Fed cut rates, according to LSEG data.

The futures imply traders see the Fed policy rate at 3.1% at the end of 2026 after the Fed's rate cut, which is little changed from levels just before, LSEG data further showed.

US Fed Rate Cut Live: Fed signals pause after 25-bps cut; projects only one rate reduction in 2026

The central bank signaled it will likely pause further reductions in borrowing costs as officials look for clearer signals about the direction of the job market and inflation that "remains somewhat elevated." New projections showed the median policymaker sees just one quarter-percentage-point cut in 2026, the same outlook as in September, with inflation expected to slow to around 2.4% by the end of next year even as economic growth accelerates to an above-trend 2.3% and the unemployment rate remains at a moderate 4.4%.

"In considering the extent and timing of additional adjustments to the target range for the federal funds rates, the Committee will carefully assess incoming data," the rate-setting Federal Open Market Committee said in language that in the past has been used to signal a pause in policy actions - an outlook at odds with market expectations of two rate cuts next year.

The decision to lower the benchmark policy rate drew three dissents, with Chicago Fed President Austan Goolsbee joining Kansas City Fed President Jeffrey Schmid in arguing the policy rate should be left unchanged, and Fed Governor Stephen Miran again advocating a larger half-percentage-point reduction.

US Fed Rate Cut Live:S&P 500 climbs, last up 0.25% after Fed lowers interest rate

Vote in favour of policy decision was 9-3

Fed Governor Stephen Miran preferred a half-percentage-point cut.

Chicago Federal Reserve President Austan Goolsbee and Kansas City Fed President Jeffrey Schmid preferred no cut.

S&P 500 climbs, last up 0.25% after Fed lowers interest rates

US Fed Rate Cut Live: Fed says job gains have slowed and unemployment edged up

Fed also said the economy has been expanding at a moderate pace.

US Fed Rate Cut Live: Fed projections show one 25 bps cut per year in 2026 and 2027

Fed cuts rates by 25 basis points to 3.50-3.75%

US Fed Rate Cut Live: The Fed will have a new leader in 2026

Jerome  Powell's leadership term ends in May, with Trump expected to announce a successor early in the new year.

Working from a short list including his top economic adviser Kevin Hassett and others, the nomination will kick off a sequence of events leading to the new chair's arrival likely in time to head the Fed's June meeting.

The Senate Banking Committee will hold a hearing to vet the nominee, followed by a confirmation vote in the full Senate.

US Fed Rate Cut Live: Fed to unveil updated outlook; analysts stick to one cut in 2026

The Fed will also issue their quarterly set of economic projections, which include forecasts for where they will set rates at the end of this year and next. Economists expect just one rate reduction next year, as they did in September.

US Fed Rate Cut Live: Global equity funds draw inflows ahead of Fed decision

Global equity funds attracted significant inflows in the week through December 3 as expectations of a potential Fed rate cut boosted risk sentiment.

Investors bought global equity funds worth a net $7.93 billion during the week in a reversal from approximately $6.41 billion worth of net sales the prior week,

US Fed Rate Cut Live: Dow climbs on rate-cut hopes as Tech drags Nasdaq lower

The Dow Jones Industrial Average edged higher on Wednesday as investors positioned for potential interest-rate cuts from the Federal Reserve and anticipated further policy easing ahead. The blue-chip index gained 212 points, or 0.5%, while the S&P 500 inched up 0.1%. The Nasdaq Composite slipped 0.2%, weighed down by a drop of more than 2% in Microsoft shares.

US Fed Rate Cut Live: Fed split over bigger risk; stubborn inflation or softening job market

With inflation still stuck above the Fed’s 2% target, policymakers remain divided over which poses the greater risk to the economy: persistent price pressures or a cooling job market.

US Fed Rate Cut Live: Fed expected to deliver third straight rate cut, hitting 3-year low of 3.6%

The Federal Reserve is expected to make its third consecutive rate cut, potentially lowering its key rate to about 3.6%, the lowest level in nearly three years. This move aims to offer relief from high borrowing costs for major purchases like homes and cars, though the reduction in costs, especially for mortgages, is not guaranteed as financial markets also play a role.

US Fed Rate Cut Live: What do major brokerages expect?

Brokerages including Morgan Stanley, Standard Chartered, Nomura, JPMorgan and Goldman Sachs expect a quarter-point reduction on Wednesday.

Traders are pricing in an 87.4% chance of a 25-basis-point interest rate cut in December, according to CME Group's FedWatch Tool.

US Fed Rate Cut Live:Wall Street banks price in fewer Fed rate cuts in 2026

Bond investors are positioning for a shallow easing cycle from the Federal Reserve.   They are reducing exposure to long-duration Treasuries and rotating into intermediate maturities for juicier returns.

Many Wall Street banks have penciled in fewer Fed interest rate cuts in 2026 on lingering inflation concerns and expectations of a more resilient U.S. economy.

US Fed Rate Cut Live: Trump sets 'Immediate rate cut' as litmus test for next Fed Chair

In a Tuesday interview with Politico, President Trump confirmed that supporting an "immediate" reduction of interest rates is a litmus test for his next nominee to lead the Federal Reserve.

When directly asked if this policy stance was a requirement, Trump simply responded, "yes."

The President has also strongly indicated that his top choice for the role is his chief economic adviser, Kevin Hassett. This suggests that Hassett aligns with the President's view that the central bank should move quickly to lower borrowing costs

US Fed Rate Cut Live: Powell's next steps crucial as Fed prepares third straight rate cut to 3-year low

The Federal Reserve is widely anticipated to approve its third consecutive reduction of its key interest rate this Wednesday

US Fed Rate Cut Live: Deep divide within Fed's 19-member committee over rates

The Federal Reserve's 19-member rate-setting committee is currently facing a deep internal division regarding the path of interest rates.

US Fed Rate Cut Live: Market focus on Fed's rate forecasts for 2026 amid expected new Chair's pro-cut push

On Wednesday, the Federal Reserve is scheduled to release its quarterly economic projections. These forecasts include the central bank's outlook for where interest rates will stand at the close of the current year and the next.

US Fed Rate Cut Live: Stocks dip ahead of Fed decision

Global stock markets dipped and the dollar steadied Wednesday as investors bided their time ahead of a highly anticipated Federal Reserve policy announcement later in the day.

On Wall Street, the needle barely moved with the tech-heavy Nasdaq off just 0.1 percent shortly after the open. The Dow added a handful of points to rise 0.2 percent while the S&P index was flat a few minutes into the session.

US Fed Rate Cut Live: Oil steadies ahead of Ukraine peace talks and Fed interest rate decision

Oil prices steadied on Wednesday after declines of about 1% in the previous session, as investors watched for progress in Russia-Ukraine peace talks and awaited a decision on U.S. interest rates.

Brent crude was up 2 cents at $61.96 a barrel by 1400 GMT while U.S. West Texas Intermediate crude gained 3 cents to $58.28.

US Fed Rate Cut Live: Gold dips ahead of Fed's rate decision; silver extends rally above $60

Gold prices edged down on Wednesday as investors awaited an expected interest rate cut by the U.S. Federal Reserve and clues on its future policy, while silver extended its rally to new highs.

Spot gold was down 0.3% to $4,197.91 per ounce at 1243 GMT. U.S. gold futures for February delivery inched 0.2% lower to $4,226.40 per ounce.

Meanwhile, spot silver rose 0.6% to $61/oz after hitting an all-time high of $61.61 earlier in the session, driven by rising industrial demand, declining inventories, and its designation as a critical mineral by the United States. The white metal has risen 112% so far this year.

US Fed Rate Cut Live: Deep Fed division on inflation threatens Powell's rate signaling for early next year

The U.S. central bank is experiencing a deep internal division primarily fueled by lingering inflation concerns. This division is expected to prevent Fed Chair Jerome Powell from providing clear signals about future interest rate moves early next year.

US Fed Rate Cut Live: US Fed set to deliver third straight rate cut today, but all eyes on cues for 2026 policy path

With markets nervous and US equities slipping earlier this week, the tone of Jerome Powell’s press conference may matter more than the cut itself. Read More

US Fed Rate Cut Live: How the Fed Decides | 12 Voting Members Hold Key to Interest Rate Path

The Federal Reserve's rate-setting committee comprises 12 voting members who determine the course of interest rates by a majority vote.

US Fed Rate Cut Live: Fed rate cut or pause | What it can mean for Indian stock markets?

A 25 basis point rate cut by the American central bank is mostly expected by analysts. Traders are pricing in an approximately 87 percent chance of a 25-basis-point rate cut today, according to CME's FedWatch Tool. Read More

US Fed Rate Cut Live: Another 25 bps reduction expected, pushing rates to lowest level in three years

Financial markets expect a third straight 25 basis points reduction, bringing levels to a range between 3.50 percent and 3.75 percent. This would be the lowest in around three years.