Federal Reserve December 2025 Meeting Minutes (Little Dinosaur 🦖)
Time: December 9-10, 2025
Location: Federal Reserve Board, Washington D.C.
I. Meeting Background and Attendance
The meeting was chaired by Jerome Powell, with all 12 committee members present. The meeting focused on assessing U.S. economic indicators, inflation trends, and labor market dynamics to determine the direction of monetary policy adjustments.
II. Economic Situation Assessment
Economic Activity: Recent data shows that the pace of economic expansion is moderate, but the growth rate has slowed compared to previous periods. Consumer spending remains resilient, partially offsetting fluctuations in the investment sector.
Labor Market: Employment growth has significantly slowed, and the unemployment rate has slightly risen before September, reflecting a gradual balance between supply and demand. The committee noted that the downside risks to employment have increased, but there are no signs of large-scale layoffs.
Inflation Situation: The inflation rate has remained relatively high since rising at the beginning of the year, primarily driven by commodity inflation. Inflation pressures are expected to gradually ease in 2026, but returning to the 2% target will still take time.
III. Monetary Policy Discussion and Decision
Interest Rate Adjustment: The committee passed a resolution with 9 votes in favor and 3 against, lowering the target range for the federal funds rate by 25 basis points to 3.50%-3.75%. Opponents included Stephen Moore, who advocated for a 50 basis point cut, as well as Austan Goolsbee and Jeffrey Schmidt, who opposed any rate cut.
Liquidity Management: Starting December 12, short-term Treasury bond purchase operations will commence, aiming to purchase approximately $40 billion within 30 days to maintain ample reserve supply. This move is intended to address liquidity fluctuations during tax payment periods and is unrelated to the stance on monetary policy.
Policy Discrepancies: There are significant internal disagreements regarding risk weights, with some members concerned about inflation rebound while others emphasize the vulnerability of the labor market.
IV. Economic Forecast and Forward Guidance
Growth Expectations: The GDP growth forecast for 2026 has been raised to 2.3%, reflecting consumer resilience and fiscal support; at the same time, inflation expectations have been slightly lowered, with core PCE expected to reach 2.5% in 2026.
Future Path: The dot plot indicates that there may be one rate cut each in 2026 and 2027, with policy being assessed in subsequent meetings, emphasizing a “no preset path.” Chairman Powell noted that current interest rates are close to the neutral range and require continuous data monitoring.
V. Risks and Challenges
Time: December 9-10, 2025
Location: Federal Reserve Board, Washington D.C.
I. Meeting Background and Attendance
The meeting was chaired by Jerome Powell, with all 12 committee members present. The meeting focused on assessing U.S. economic indicators, inflation trends, and labor market dynamics to determine the direction of monetary policy adjustments.
II. Economic Situation Assessment
Economic Activity: Recent data shows that the pace of economic expansion is moderate, but the growth rate has slowed compared to previous periods. Consumer spending remains resilient, partially offsetting fluctuations in the investment sector.
Labor Market: Employment growth has significantly slowed, and the unemployment rate has slightly risen before September, reflecting a gradual balance between supply and demand. The committee noted that the downside risks to employment have increased, but there are no signs of large-scale layoffs.
Inflation Situation: The inflation rate has remained relatively high since rising at the beginning of the year, primarily driven by commodity inflation. Inflation pressures are expected to gradually ease in 2026, but returning to the 2% target will still take time.
III. Monetary Policy Discussion and Decision
Interest Rate Adjustment: The committee passed a resolution with 9 votes in favor and 3 against, lowering the target range for the federal funds rate by 25 basis points to 3.50%-3.75%. Opponents included Stephen Moore, who advocated for a 50 basis point cut, as well as Austan Goolsbee and Jeffrey Schmidt, who opposed any rate cut.
Liquidity Management: Starting December 12, short-term Treasury bond purchase operations will commence, aiming to purchase approximately $40 billion within 30 days to maintain ample reserve supply. This move is intended to address liquidity fluctuations during tax payment periods and is unrelated to the stance on monetary policy.
Policy Discrepancies: There are significant internal disagreements regarding risk weights, with some members concerned about inflation rebound while others emphasize the vulnerability of the labor market.
IV. Economic Forecast and Forward Guidance
Growth Expectations: The GDP growth forecast for 2026 has been raised to 2.3%, reflecting consumer resilience and fiscal support; at the same time, inflation expectations have been slightly lowered, with core PCE expected to reach 2.5% in 2026.
Future Path: The dot plot indicates that there may be one rate cut each in 2026 and 2027, with policy being assessed in subsequent meetings, emphasizing a “no preset path.” Chairman Powell noted that current interest rates are close to the neutral range and require continuous data monitoring.
V. Risks and Challenges
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.
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