The Federal Reserve is expected to announce its decision on interest rates today, December 9, 2025, with an 88% chance of a 25-basis-point cut, lowering the federal funds rate to 3.75%-4%. This would be the third consecutive rate cut, following similar moves in September and October. The decision is seen as a response to slowing labor market trends and inflation concerns. Rate cuts can boost economic activity by making borrowing cheaper, but also risk fueling inflation. The Fed's dual mandate is to keep prices stable and ensure full employment, and its actions will depend on incoming data, particularly labor market indicators and inflation trends.
