The Fed Cuts Rates By 0.25% Again, But A New Divide Is Taking Shape

Benzinga

The Fed delivered a 25-bp cut to 3.5%–3.75% with three dissents, shifting guidance toward a slower and more uncertain path for 2026 as policymakers debate timing and size of future moves. Growth projections improved, unemployment stayed steady, and inflation edged lower.

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00:00It's Benzinga, bringing Wall Street to Main Street.

00:03The Federal Reserve cut rates by 25 basis points to 3.5% to 3.75% at its December meeting

00:10and delivered a third straight reduction that matched expectations, according to Benzinga.

00:15Three officials dissented as Governor Stephen Moran backed a larger 50 basis point cut,

00:20and Kansas City Fed President Jeffrey Schmid and Chicago Fed President Austin Goolsbee voted to hold rates.

00:25Policymakers updated forward guidance and shifted the debate to the extent and timing of any move in 2026.

00:32The new wording shifts the debate to the extent and timing of future moves,

00:36signaling a slower path where cuts may be smaller, delayed, or spaced out due to caution about 2026.

00:43Growth projections improved for 2025 through 2027.

00:47Unemployment forecasts were steady, and inflation moved lower from September.

00:51For all things money, visit Benzinga.com.

00:54For all things money, visit Benzinga.com.

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