US Fed Meeting 2025 Highlights: The Jerome Powell-led US Federal Reserve's Federal Open Market Committee (FOMC) decided to cut its key benchmark interest rates by 25 basis points on Wednesday, 10 December 2025.
The Fed decided to cut the interest rate down to the range of 3.50% to 3.75%, marking the 25 basis point rate cut on 10 December 2025, amid the elevated inflation level in the US economy and a weakening job market.
“In support of its goals and in light of the shift in the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 3-1/2 to 3‑3/4 per cent,” said the FOMC in its official statement on Wednesday.
US Fed's December rate cut marks the third consecutive rate cut starting from September 2025. The central bank kept its key interest rates unchanged since December 2024 before cutting it for the first time in September this year.
The US Fed's December policy outcome comes amid the conflicting trends in the US economy. The central bank is focused on creating a balance between its dual mandate of stabilising prices while catering to the country's labour market.
Although the Fed's committee cut the interest rate in October 2025, the panel also highlighted that it will keep assessing the incoming economic data to gauge the economic outlook for the country and to understand the interest rate trajectory.
Data collected from the US Bureau of Labor's November release shows that the unemployment rate in the US hit 4.4% in September 2025, while the country added 119,000 jobs despite the federal government shutdown during the time.
On 29 October 2025, the US Federal Reserve decided to cut the key interest rate for the economy by 25 basis points to the range of 3.75% to 4.00%, for the second time in the calendar year, amid the elevated inflation levels and the US government shutdown.
The US Fed Chairman Jerome Powell also highlighted that the inflation in the US economy has picked up due to the rise in goods prices in the country. Powell attributed this rise in prices to the tariffs imposed by President Donald Trump on the import of foreign goods.
On the December rate cut front, Powell said that the central bank cutting its key interest rates is not a ‘foregone conclusion’. However, this time the markets are already pricing in a rate cut on 10 December 2025.
“A further reduction in the policy rate at the December meeting is not a foregone conclusion, far from it,” Powell said in his media address in October.
All eyes are now on the US Fed's FOMC and Chairman Jerome Powell, as the central bank will announce its policy outcome later today.
Follow all US Fed December policy outcome-related updates here at Mint!
On Wednesday, Federal Reserve officials raised their GDP growth forecast for 2026 to 2.3% from the earlier estimate of 1.8%.
The US Federal Reserve cuts the key interest rate of the US economy by 25 basis points to 3.50%-3.75% amid elevated US inflation on Wednesday, December 10, 2025.
US Fed Meeting 2025 LIVE: N. ArunaGiri, the CEO of TrustLine Holdings, an equity research and asset management firm, said that further rate cuts from the US Federal Reserve remain uncertain as the central bank aims to lean more towards the upcoming economic data for interest rate easing.
“The Fed itself appears poised to lean more heavily on incoming data rather than on any preset bias toward additional easing,” said the expert.
The market expert also highlighted that Fed's monetary policy action on 10 December 2025 to cut the interest rates by 25 basis points was in line with the consensus estimates.
“The real takeaway lies in the underlying signals the Fed is sending. A key one is the scale and immediacy of its bond purchase program,” said N. ArunaGiri.
“Against market expectations of $15 billion purchase, the Fed has committed to nearly USD 40 billion, and that too with immediate effect, beginning Friday. This is a materially positive development for short-term yields. Added to this is the Fed’s constructive upgrade on the GDP growth for 2026 by half-a-percentage points from its Sept estimates,” said the market expert.
Yesterday's meeting is the Fed’s final session before 2026, a year set for major transitions. A new chair is expected after Powell’s term concludes in May amid growing political pressure.
The next meeting of the US FOMC is scheduled for January 27-28, 2026.
The US labour market and employment have faced downside risks in recent months, as the US Fed acknowledged the risk of both inflation and the labour market aspect of its dual mandate.
“The Committee seeks to achieve maximum employment and inflation at the rate of 2 per cent over the longer run. Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment rose in recent months,” said the Fed in its policy announcement.
The US Federal Reserve noted that reserve balances have decreased, and the central bank now aims to purchase short-term bonds in an effort to maintain ample supply of reserves.
“The Committee judges that reserve balances have declined to ample levels and will initiate purchases of shorter-term Treasury securities as needed to maintain an ample supply of reserves on an ongoing basis,” said the US Fed.
A sharply divided Federal Reserve cut its benchmark interest rate, a move that typically lowers borrowing costs for consumers and can stimulate economic activity and, in turn, oil demand.
According to the Energy Information Administration’s weekly Petroleum Status Report, U.S. crude inventories dropped by 1.8 million barrels to 425.7 million barrels for the week ended December 5. Analysts surveyed by Reuters had expected a larger decrease of 2.3 million barrels.
“Job gains have slowed this year, and the unemployment rate has edged up through September. More recent indicators are consistent with these developments. Inflation has moved up since earlier in the year and remains somewhat elevated,” the FOMC said.
Fed Chair Jerome Powell said that the central bank will either maintain or cut interest rates at the next Fed meeting next year, as the Fed adopts a wait-and-watch approach based on forthcoming economic data.
The Indian stock market ended its three-day decline with strong gains on Thursday, 11 December, after the US Federal Reserve cut interest rates by 25 basis points and signalled one more rate cut next year.
The Sensex closed 427 points, or 0.51%, higher at 84,818.13, and the Nifty 50 ended at 25,898.55, up 141 points, or 0.55%. The market witnessed broad gains as the BSE Midcap and Smallcap indices also rose by 0.79% and 0.51%, respectively.
After the policy announcement, Trump said the rate cut could be “at least” twice as large as what was delivered and added that he wants the next Fed chair to be someone “honest” about interest rates.
On the overnight Fed rate cut, in our view, what is key is not the rate action. In a way, 25 bps cut was largely in line with the consensus expectations. The real takeaway lies in the underlying signals the Fed is sending. A key one is the scale and immediacy of its bond purchase program.
Against market expectations of USD 15 billion-dollar purchase, the Fed has committed to nearly USD 40 billion, and that too with immediate effect, beginning Friday. This is a materially positive development for short-term yields. Added to this is the Fed’s constructive upgrade on the GDP growth for 2026 by half-a-percentage points from its Sept estimates.
Taken together, these factors augur well for the markets in the near term. The trajectory of further rate cuts, however, remains uncertain. The Fed itself appears poised to lean more heavily on incoming data rather than on any preset bias toward additional easing.
— N. ArunaGiri, CEO, TrustLine Holdings a leading Equity Research and Asset Management firm
The Fed has delivered a quarter-point rate cut, marking its third reduction this year and taking the policy rate to the lowest level in over three years. The move signals that concerns over slowing growth and labour-market softness now outweigh earlier fears of persistent inflation, even as price pressures remain marginally above the 2% target. For global equities, the shift is broadly supportive, with lower yields typically lifting risk appetite and favouring both growth and cyclical assets. For India, a more accommodative Fed and a maturing global rate cycle ease worries around dollar strength and capital outflows, creating a constructive backdrop for the rupee and domestic liquidity. In this environment, buying interest in financials, consumption, and select rate-sensitive sectors is likely to remain resilient, although phases of volatility may persist given the divided Fed and continued uncertainty over the 2026 policy trajectory.
— Rajesh Palviya, SVP - Research, Axis Securities
The Fed cut rates by 25 bps yesterday, and the mood across markets immediately turned lighter. Investors were expecting some easing, but the confirmation still brought a sense of relief. For India, this move generally works in our favour — a softer dollar reduces pressure on the rupee, and foreign investors tend to take a more positive view of emerging markets. That usually helps equities hold their ground.
Gold and silver also reacted well. These metals usually shine when rates fall because the dollar weakens and real returns on cash drop. So the Fed’s decision creates a friendlier environment overall, both for Indian markets and for precious metals in the short term
— Dr. Ravi Singh, Chief Research Officer from Master Capital Services Ltd.
The initial market reaction to the widely expected interest rate cut was negative, reflecting a lack of consensus about the decision and a lack of clear guidance for next year. The Fed then announced a bond-buying programme to smooth stains in the money markets, which provided a boost to gold and silver. Prices gained as much as 1.6% and 4.6% following the announcement, reminiscent of the Fed’s QE programmes in the aftermath of the Global Financial Crisis. Back then, QE was associated with fears of inflation and a debasement of the US dollar. This very much mirrors today’s mood among some participants in the gold and silver markets. While boosting the already bullish market mood, historical evidence suggests no inflationary impact from such programmes. The narrative of the debasement trade had already fuelled the rally in the gold and silver markets earlier this year, but in our view, it also lacks evidence.
We expect more US dollar weakness but attribute this to cyclical and structural factors rather than active debasement by policymakers. Silver’s reaction to the Fed’s announcement was again outsized, increasing its outperformance over gold since the resumption of the rally in early November to more than 20 percentage points.
Considering a fairly similar fundamental backdrop for both gold and silver, we believe that such a stark outperformance is not fully justified. Rather than fundamentals, we believe this reflects the strong momentum of speculative traders and trend followers in the silver market, which is also reflected in our own technical assessment. While short-term risks are skewed to the upside because of the momentum in the market, we reiterate our view that prices have moved too far too fast and we therefore remain Neutral. At the same time, we reiterate our Constructive view on gold, supported by the ongoing strength of investment demand and central-bank buying.
— Views by Carsten Menke, Head Next Generation Research, Julius Baer
“The rate decision was on expected lines, but divided votes within the committee hints of a potentially tricky path ahead. Although, what could matter even more now is who steps in as the next Chair of the US Fed. With President Trump likely to favour a candidate inclined towards deeper rate cuts, the market could be staring at a more dovish tilt in the months ahead. And with labour-market softness continuing, the macro backdrop itself may prompt further monetary easing, regardless of who takes the position. We believe, the rate cut could be potentially more than 25 bps in 2026, which should support US markets as it did this year, even when AI bubble fear periodically spooked the markets. A continued rate cut cycle may mean equity markets can have more legs in the near term. Also, Fed easing could likely benefit EMs as well,” the brokerage firm said.
“The Fed’s December cut to 3.50-3.75%, its third 25 bps reduction in a row, signals a pause in the easing cycle, with inflation still elevated and policymakers cautious about potential tariff-related pressures. For India, while lower U.S. rates should ease capital flow pressures, the INR depreciation of around 4.9% YTD underscores market scepticism that Fed cuts alone can offset structural headwinds from Trump tariffs and elevated U.S. Treasury yields. We expect the INR to remain below 90/USD for the rest of 2025 and gain strength through 2026 to reach around 86/USD by the end of next year. The key question is whether the Fed sustains further cuts in 2026. Any pivot toward a prolonged pause or hawkish stance could revive dollar strength, deepen rupee depreciation, and trigger rating downgrades for India's externally vulnerable sectors,” said Rajeev Sharan, Head – Criteria, Model Development & Research Brickwork Ratings.
"In a much-anticipated move, the FOMC voted with 9:3 majority for a 25-bps rate cut, bringing the federal funds rate range to 3.50-3.75% on the back of increased downside risks to employment. So far, the FOMC has delivered a cumulative 175 bps of rate cut since September 2024. Though the upside risks to inflation still remain, largely due to higher tariffs, these shifts are expected to be short-lived, thereby emphasizing more on labour markets. In addition to a rate cut, the Fed also decided to start buying short-term treasury securities (mainly treasury bills), in order to stabilize money markets and to maintain ample supply of reserves over time.
Labour market conditions continue to show signs of softness, with job gains slowing and the unemployment rate rising noticeably from the last year. While reduced immigration and lower labourforce participation may be adding some strain, labour demand has clearly moderated. Overall economic growth remains moderate with pockets of stress seen in sectors like housing, while consumer spending and business fixed investment remain solid," said Ankita Pathak, Head – Global Investments, Ionic Asset.
"On the overnight Fed rate cut, in our view, what is key is not the rate action. In a way, 25 bps cut was largely in line with the consensus expectations. The real takeaway lies in the underlying signals the Fed is sending. A key one is the scale and immediacy of its bond purchase program.
Against market expectations of USD 15 billion-dollar purchase, the Fed has committed to nearly USD 40 billion, and that too with immediate effect, beginning Friday. This is a materially positive development for short-term yields. Added to this is the Fed’s constructive upgrade on the GDP growth for 2026 by half-a-percentage points from its Sept estimates.
Taken together, these factors augur well for the markets in the near term. The trajectory of further rate cuts, however, remains uncertain. The Fed itself appears poised to lean more heavily on incoming data rather than on any preset bias toward additional easing," said N. ArunaGiri, CEO, TrustLine Holdings a leading Equity Research and Asset Management firm.
"From September to December 2024, the U.S. Federal Reserve cut the federal funds rate by 100 bps. Likewise, from September to December 2025, the Fed reduced short-term rates by a further 75 bps, including today’s 25 bps cut. With this move, the federal funds rate now stands at 3.625%—very close to the estimated policy-neutral rate of 3.25%.
Looking ahead, the Fed’s dot plot indicates just one additional rate cut in 2026 and one more in 2027, though the timing is uncertain. Much will depend on whether inflation can ease from 3.0% toward the 2.0% target and whether job growth avoids further deterioration. Adding to the uncertainty is the transition to a new Fed Chair in May 2026. Reflecting these factors, the 10-year U.S. Treasury yield has risen in the last month from 4.00% to 4.16%. Higher long-term rates and unclear policy expectations have weighed on asset valuations and heightened volatility across rate-sensitive sectors.
All this policy uncertainty is negative for emerging markets. Regarding India, the impact is a bit worse as the India–U.S. trade deal has also not been finalized. These developments are putting additional downward pressure on the rupee–dollar exchange rate. As a result, we expect FII inflows into India to remain under pressure, which could further weigh on equity valuations and influence debt markets. In contrast, gold prices in India are likely to remain supported in this environment. While India’s strong long-term growth outlook remains intact, the near-term macroeconomic backdrop will likely be dominated by these global headwinds," said Nachiketa Sawrikar, Fund Manager, Artha Bharat Global Multiplier Fund
"“The Federal Reserve’s 25 bps rate cut, which brings the federal funds rate down to 3.5%–3.75%, provides much-needed clarity to global markets. While the move supports easing financial conditions in the U.S., its broader significance lies in the stability it offers to emerging economies. For India, a predictable Fed trajectory helps anchor global liquidity and reduces external volatility, by factors that are crucial as domestic businesses plan for 2026 in a still-evolving macro environment.
The combination of the Fed’s calibrated easing and the RBI’s recent rate cut to 5.25% strengthens India’s credit landscape at a time when SMEs and MSMEs are actively seeking growth capital. A more stable global rate cycle allows Indian lenders, fintechs, and NBFCs to manage risk more efficiently and continue expanding credit access.
Overall, the Fed’s decision reinforces a supportive backdrop for India’s economic momentum. It enhances investor sentiment, underpins cross-border trade and technology flows, and gives Indian enterprises the confidence to accelerate digital transformation, capacity expansion, and long-term investment planning," said Rohit Arora, CEO and Co-Founder, Biz2X and Biz2Credit.
“The Federal Reserve cut its key interest rate by 0.25%, which is expected to stimulate growth and likely boost oil demand. We have baked the rate cut into our oil-price estimates, one of the catalysts supporting prices. The US captured an oil tanker near Venezuela, the first such action reported as military tensions rise in the region. Meanwhile, Russia's crude output last month stayed well below its OPEC+ quota, hampered by weak demand for sanctioned barrels and Ukrainian drone strikes. Even though output was 19 kbd above October, it missed the November target by over 100 kbd, the largest shortfall versus quota in more than two years.”
A sharply divided Federal Reserve cut its benchmark interest rate, a move that typically lowers borrowing costs for consumers and can stimulate economic activity and, in turn, oil demand.
Oil prices also found support from a decline in U.S. crude stockpiles, although the drawdown was smaller than anticipated.
According to the Energy Information Administration’s weekly Petroleum Status Report, U.S. crude inventories dropped by 1.8 million barrels to 425.7 million barrels for the week ended December 5. Analysts surveyed by Reuters had expected a larger decrease of 2.3 million barrels.
Oil prices held largely steady on Thursday as markets refocused on Russia-Ukraine peace negotiations and monitored potential repercussions from the U.S. seizure of a sanctioned tanker near Venezuela.
Brent crude futures slipped by 5 cents (0.08%) to $62.16 a barrel at 0400 GMT, while U.S. West Texas Intermediate eased just 1 cent (0.02%) to $58.45 a barrel.
“Bitcoin and major altcoins slipped as traders digested the U.S. Federal Reserve’s third consecutive 25 bps rate cut of 2025 and a cautious macro outlook. The move, while briefly lifting equities, failed to sustain crypto momentum. Bitcoin fell 2.8% to $89,900, and Ether dropped nearly 3.6% to $3,188. Fed Chair Jerome Powell’s mixed guidance, signaling limited room for further easing, kept risk appetite muted,” said Riya Sehgal, Research Analyst, Delta Exchange.
World's largest cryptocurrency Bitcoin and Ethereum fell by nearly 3% after the US Federal Reserve struck a cautious tone, pointing to rising inflation risks and weakening employment. This tempered expectations of sharp rate cuts.
On Thursday, December 11, Bitcoin was trading at $90,154, while Ethereum stood at $3,193.
“For Indian investors, the structural depth in terms of global AI infrastructure, energy transition, biotech, cybersecurity, consumer platforms with worldwide moats that the US equity market provides, is hard to match. A healthy mix of US-large cap, quality and AI adjacent exposure should be able to balance currency, sector and policy risks while still taking part in global innovation and earnings growth. Also, the INR depreciation trend vs the dollar means US assets could be a long-term hedge against wealth erosion, especially for future US linked costs like education, travel, global consumption,” said Subho Moulik, CEO at Appreciate.
Brokerage firm Emkay Global Financial said in a report that given expected growth resilience and elevated inflation, we feel Powell's remarks raise the bar for future cuts. The additional cut(s) in 2026 is now well tied to how shaky the labor market is ahead. But the cut cycle is mostly over. We reckon the US labor market may remain soft till the tariff pass-through is complete.
“Global sentiment strengthened overnight after the Federal Reserve delivered a 25 bps rate cut to 3.50%–3.75%, marking the third consecutive reduction in this cycle. But the tone of the policy message remained cautious. The FOMC was split, with two members favoring no cut and one arguing for a deeper 50 bps move, underscoring the uncertainty around the path ahead. Inflation remains sticky at 2.8%, unemployment has climbed to 4.4%, and the Fed is now focused on supporting growth without risking another inflation rebound. Markets welcomed the move initially, with the Dow rallying over 1% and the S&P 500 up 0.68%, while the VIX cooled sharply. Asian markets opened firm, supported by the U.S. rebound and improving manufacturing data from China. European markets, however, remained mixed as DAX and CAC traded mildly lower even as FTSE managed small gains. Commodities stayed stable with crude around $58, while gold rose 1.1% and silver climbed 2.77%.”
Ross Maxwell, Global Strategy Operations Lead at VT Markets, underscored that increased policy uncertainty about the interest rate trajectory, inflation trends, and broader economic conditions generally puts downward pressure on the US dollar, as markets reassess growth and yield prospects.
"A softer dollar, combined with lower interest rates, supports gold and silver by reducing the opportunity cost of holding non-yielding assets. Investors tend to look toward safe-haven assets, strengthening demand for precious metals. Silver benefits from this dynamic as well, though its industrial exposure adds an additional layer of volatility and upside potential," said Maxwell.
Gold prices tend to gain in low-interest-rate environments as the yellow metal is a non-yielding asset.
The focus now is on the US job and CPI inflation data for November and the PCE Price Index for October, scheduled for next week. These data will influence the expectations about the interest rate path of the US Fed.
International gold prices also saw positive momentum, with US gold futures for February gaining more than 1% to $4,271.30 per ounce, while silver jumped to another record high after the US Fed cut interest rates.
Gold prices rose about half a percent, while silver surged to a new all-time high on the MCX during Thursday morning trade on December 11. The gains came after the US Federal Reserve cut interest rates by 25 basis points and indicated one more rate cut next year. Around 9:05 am, MCX gold February futures were up 0.40% at ₹1,30,320 per 10 grams, while MCX silver March futures climbed 1.81% to ₹1,92,148 per kg after touching a fresh record of ₹1,92,529 per kg.
Indian stocks opened slightly higher on Thursday, with the Sensex and Nifty ending their three-day losing streak. The uptick came after the U.S. Federal Reserve announced the expected 25-basis-point rate cut, a decision investors hope will ease foreign outflows.
The S&P BSE Sensex inched up by 69 points (0.08%) at the opening, reaching 84,460, while the NSE Nifty 50 started the session at 25,781, gaining 23 points or 0.09%.
Following the policy announcement, Trump said the rate cut could be “at least” twice as large as what was delivered and added that he wants the next Fed chair to be someone “honest” about interest rates.
Despite Powell’s comments, money market futures continue to imply a 77% probability of two or more rate cuts in 2026.
U.S. stock futures tumbled late Wednesday after Oracle Corp.’s disappointing results reignited worries that major AI investments aren’t delivering the expected payoff.
Dow Jones futures slipped more than 220 points, S&P 500 futures dropped 65 points, and Nasdaq futures sank nearly 400 points.
Oracle shares fell 11.5% in after-hours trade as the company reported weaker-than-expected second-quarter revenue, with its EPS beating estimates only because of a one-time gain.
Indian rupee opens at 89.98 per U.S. dollar, nearly unchanged from 89.9650 previous close
Indian market indices - Sensex and Nifty 50 - trades in green on Thursday, December 10
VK Vijayakumar, Chief Investment Strategist, Geojit Investments, noted that the dot plot indicates one more rate cut in 2026 and another in 2027. An interesting aspect of this decision is the 9–3 vote, the first such split perhaps since 2019. This divergence among policymakers is likely to influence rate decisions in the coming years.
VK Vijayakumar, Chief Investment Strategist, Geojit Investments, noted that direct impact of the US Fed policy will be nominal on the Indian stock market, as the domestic market is currently weighed down by two key domestic factors: relentless FII selling and weak corporate earnings over the last six quarters.
The Indian stock market is not expected to react strongly to the Fed’s policy, since the decision was largely anticipated and the Fed has offered mixed indications regarding the future direction of interest rates.
"We do not think the Fed's move will have a major impact on the Indian stock market. The domestic market is struggling with liquidity problems due to the flood of IPOs. The IPO rush needs to fizzle out for the stock market to sustain gains," said G Chokkalingam, the founder and head of research at Equinomics Research Private Limited.
According to Jeffrey Roach, Chief Economist for LPL Financial, there is no risk-free path for monetary policy. The committee appears to be relying on higher productivity, suggesting stronger growth despite slower job creation.
"Projections with stronger growth and lower unemployment suggest the Fed will remain committed to bringing inflation down. Investors should expect the Fed to remain on hold in Q1, especially if the economy responds to the tailwinds from fiscal and policy support. The first cut next year may come in Q2," said Roach.
As anticipated, the central bank was divided in its decision: nine of the 12 members supported a rate cut, while one advocated for a larger 50 basis point reduction.
According to Reuters, only four policymakers forecast a single rate cut next year, another four expect two cuts, and the remaining four anticipate even more reductions.
The Fed emphasized that its future policy moves will depend on incoming economic data, highlighting the contrasting signals of slowing growth alongside persistent inflation in the US economy.
The next meeting of the US FOMC is scheduled for January 27-28, 2026
Shares of ZTE Corp dropped over 5% following a Reuters report on Thursday, which stated that the Chinese telecom equipment company might have to pay over $1 billion to the U.S. government to resolve foreign bribery allegations.
Japan’s Nikkei 225 opened higher but later gave up its gains, ending the session down 0.11%, while the Topix slipped 0.15%.
In South Korea, the Kospi rose 0.66%, and the small-cap Kosdaq advanced 0.73%.
Hong Kong’s Hang Seng index climbed 0.95%, and China’s CSI 300 edged slightly higher. Australia’s S&P/ASX 200 also gained, rising 0.63%.
