The U.S. Federal Reserve’s Federal Open Market Committee (FOMC) cut its benchmark interest rate by 25 basis points to a range of 3.50% to 3.75% following its two-day policy meeting, according to an official statement issued on Wednesday, 10 December.
The decision for the third rate cut this year passed with a 9–3 vote, underscoring growing divisions inside the FOMC.
Fed Chair Jerome Powell described the outcome as a “close call” during his news conference, adding that he “could make a case for either side”.
“Job gains have slowed this year, and the unemployment rate has edged up through September. More recent indicators are consistent with these developments,” Powell noted.
According to him, Fed predicts only a modest rate cut in 2026, with inflation forecast to ease next year even as economic growth strengthens and unemployment remains moderate.
Powell said policymakers were now in a position to “wait and see how the economy evolves”.
He also reiterated that the inflationary impact of recent tariffs is likely to be temporary.
“A reasonable base case is that the effects of tariffs on inflation will be relatively short-lived, effectively a one-time shift in the price level,” Powell said, emphasising the committee’s responsibility to prevent such price shocks from turning into ongoing inflation pressure.
Alongside the rate cut, the Fed announced it would resume purchases of U.S. Treasury securities, beginning with a $40 billion operation on Friday (12 December).
The central bank said these purchases are expected to “remain elevated for a few months” before gradually declining.
Powell said the current policy rate is approaching what many officials consider a neutral level — one neither stimulating nor restraining economic activity — following cumulative cuts over the past year.
Still, he stressed that the path ahead will depend on incoming data, as the committee evaluates whether inflation is continuing to move sustainably toward the Fed’s 2% target.
Meanwhile, Chicago Fed President Austan Goolsbee and Kansas City Fed President Jeffrey Schmid opposed the cut and argued for holding rates steady, warning that further easing risked fuelling inflation.
Federal Reserve Governor Stephen Miran dissented in the opposite direction, favouring a deeper half-point reduction to counter rising risks in the labour market.
The December move marks the Fed’s third consecutive rate cut since September 2025, bringing total reductions for the year to 75 basis points after the central bank left interest rates unchanged throughout 2024.
Indian police detained more than 2,000 protesters in Delhi on Saturday as authorities blocked a planned demonstration calling for the resignation o...
A powerful explosion has been reported at King Khalid International Airport in Riyadh, raising fresh concerns over aviation security in Saudi Arabi...
At least 12 people, including three children, have been killed in a Russian attack on the Ukrainian city of Zaporizhzhia, a day after U.S. Presiden...
Leaders of countries from the Commonwealth of Independent States (CIS) have agreed to hold coordinated population censuses around 2030. They took the decision at the CIS Council of Heads of State meeting in Awaza, Turkmenistan on Friday, media reported.
Britain and Israel have reached a temporary compromise over the future of the British Consulate General in East Jerusalem, easing a diplomatic dispute that had threatened to further strain relations between the two countries.
A powerful explosion has been reported at King Khalid International Airport in Riyadh, raising fresh concerns over aviation security in Saudi Arabia as tensions across the region continue to escalate.
South African judge Navanethem “Navi” Pillay won the Nobel Peace Prize on Friday “for her efforts to promote peace and international law,” the Norwegian Nobel Committee said.
The U.S. has imposed sanctions on the International Criminal Court (ICC) on Friday (9 October) escalating tensions with European allies and potentially targeting companies that provide services to the tribunal. The move came hours after former ICC judge Navi Pillay won the Nobel Peace Prize.
Uzbekistan and Russia have a portfolio of more than 200 joint projects worth almost $6 billion, as the two countries continue to expand regional and business ties. The projects were discussed during the third meeting of the Council of Regions of Russia and Uzbekistan, held in Fergana, Uzbekistan.
In the marshlands of Malluba in southern Azerbaijan, Kamil Mammadov follows a routine that has been passed down through generations. His family has worked with medicinal leeches for centuries, harvesting and breeding a species known as Hirudo orientalis, or the Caucasian medicinal leech.
Baku is hosting the second Azerbaijan International Investment Forum (AIIF 2026) and it’s attracting more interest this year, Azerbaijan’s Deputy Prime Minister told AnewZ. “The agenda is very impressive. More guests, more interest,” he said.
Warren Buffett has stepped down as chairman of Berkshire Hathaway, marking the end of one of the most influential leadership tenures in corporate history and completing a succession process that has been years in the making.
Nigerian billionaire Aliko Dangote launched Africa's biggest-ever share sale on Monday, opening the oil refinery that has remade the country's fuel market to public ownership for the first time.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment