LIVE
Federal Reserve live coverage: Fed set to cut interest rates for third time this year, 2026 forecast in focus
Myles Udlandand
Grace O'DonnellUpdated
Mon, December 8, 2025 at 3:45 PM EST
1 min read
The Federal Reserve's final meeting of the year is set to begin on Tuesday morning, Dec. 9, with the central bank scheduled to announce its final monetary policy decision at 2:00 p.m. ET on Wednesday afternoon.
Investors expect the Fed will cut rates by 0.25%, its third cut of the year, at the conclusion of its two-day meeting, with data from the CME Group showing a 90% chance the central bank will cut rates this week.
Along with its final policy decision of the year, the Fed will also publish its final Summary of Economic Projections (SEP) for 2025, which includes forecasts from Fed officials on economic growth, inflation, and interest rates for the coming years.
In September, the SEP showed the Fed's median forecasts calling for just one interest rate cut in 2026 following three reductions in 2025. Changes to this outlook will be top of mind for investors on Wednesday.
Investors will also be closely watching for further disagreement among Fed officials, as October's policy statement revealed two members of the FOMC voted against the decision to lower rates by 0.25%.
LIVE
2 updates
- Mon, December 8, 2025 at 8:45 PM UTC Grace O'Donnell
Fed expected to cut rates this week. The outlook for 2026 is far less certain.
The consensus around the Federal Reserve’s policy move on Wednesday has firmed around a 25 basis point rate cut — even if the decision will be a close one, as Yahoo Finance's Jennifer Schonberger details.
Traders are pricing in an 89% chance that the Fed lowers interest rates by 25 basis points at the conclusion of the FOMC meeting on Wednesday, according to CMEGroup's FedWatch.
But looking ahead to the January meeting and 2026 broadly, the path is even less certain.
One widely held view is that the Fed will move forward with a "hawkish cut" on Wednesday, in which the central bank lowers rates but hints at a pause in January, JPMorgan’s Michael Feroli wrote in a Dec. 5 note. Traders have put a 23% probability that the Federal Reserve will continue cutting rates at its Jan. 27-28 meeting.
“At the press conference, we expect that Powell will stress that with policy rates close to neutral, the time for risk management cuts is past and that further cuts would only come with a material deterioration in the labor market,” Feroli wrote.
"We don’t expect him to comment directly on January," Feroli added, "but instead to highlight that there is a lot of data to be released between now and the January meeting and that will guide their decision."
For the remainder of the year, views range from the Fed cutting rates at its next few policy meetings due to a deterioration in the labor market to additional rate cuts in the summer due to a change in Fed leadership.
Read more about 2026 predictions for Federal Reserve policy here.
Mon, December 8, 2025 at 5:42 PM UTC Myles Udland The Fed's final meeting of 2025 is about one word: dissent
The Federal Reserve's eventful 2025 wraps up this week, and another 0.25% rate cut is expected.
But the real drama in the central bank's release will be in how much agreement, or not, there is with this decision.
As Yahoo Finance's Jennifer Schonberger noted in her preview of the event, at least three regional Fed presidents have signaled that the case for cutting rates this week does not appear obvious. One of those includes Kansas City Fed president Jeff Schmid, who voted against October's rate cut.
Add in that Fed Governor Stephen Miran has twice dissented in favor of a larger rate cut, the central bank could be looking at upward of four votes against the expected decision to lower rates by another 0.25% on Wednesday.
View Comments