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.
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Global oil prices reached a four year high on Monday (9 March), surpassing $119 a barrel, as conflict in the Middle East rumbled on. Meanwhile, the Turkish Military said NATO air defence systems destroyed a missile fired from Iran towards the country.
Global oil prices surpassed $119 a barrel on Monday (9 March, 2026), an almost four year high, as the Middle East conflict rumbled on.
China has urged Afghanistan and Pakistan to resolve their dispute through dialogue after Chinese envoy Yue Xiaoyong met Afghan Foreign Minister Amir Khan Muttaqi, as fighting between the two neighbours entered its eleventh day.
Iranian civilian and military officials have pledged their obedience to the new leader, Ayatollah Seyed Mojtaba Khamenei, with President Masoud Pezeshkian saying his leadership “will herald a new era of dignity and authority for the Iranian nation.”.
Mojtaba Khamenei, son of the late Ayatollah Ali Khamenei, is a hardline cleric with strong backing from the Islamic Revolutionary Guard Corps. His rise signals continuity in Tehran's anti-Western policies.
Global oil prices surpassed $119 a barrel on Monday (9 March, 2026), an almost four year high, as the Middle East conflict rumbled on.
Trump says the United States "don’t need people that join wars after we’ve already won," targeting his criticism at UK Prime Minister Keir Starmer. Israel continues to fire missles at strategic sites in Iran and Gulf regions report more strikes from Iran.
China has urged Afghanistan and Pakistan to resolve their dispute through dialogue after Chinese envoy Yue Xiaoyong met Afghan Foreign Minister Amir Khan Muttaqi, as fighting between the two neighbours entered its eleventh day.
Iran named Mojtaba Khamenei to succeed his father Ali Khamenei as supreme leader on Monday (9 March), signaling that hardliners remain firmly in charge, as the week-old U.S.-Israeli war with Iran pushed oil above $100 a barrel.
Global financial markets remained on edge on Friday as the escalating war involving the United States, Israel and Iran continued to rattle investors, fuelling volatility in stocks and sending energy prices sharply higher.
China’s top leadership has unveiled a new push to turn advanced technologies into large-scale industrial priorities as part of the country’s upcoming 15th Five-Year Plan, which will guide economic and social development from 2026 to 2030.
The European Commission sees no immediate impact on the European Union's security of oil supply from the escalating conflict in the Middle East, it said in an email to EU governments, seen by Reuters on Monday (2 March).
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Global debt surged to a record $348.3 trillion at the end of 2025, after nearly $29 trillion was added over the year, marking the fastest annual increase since the pandemic, according to the Institute of International Finance (IIF) report released on Wednesday.
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