Miangst01
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The Fed cut interest rates by 0.25 percentage points, bringing the federal funds rate to a range of 3.50-3.75%. This reduction aligns perfectly with market expectations over the past month. Because it was "priced in" beforehand, this rate cut did not create a strong enough shock to push gold into an immediate breakout trend.
The Fed has not provided specific guidance for the medium term. The December press release closely mirrors the content of the October meeting: the U.S. economy is growing at a moderate pace, inflation remains high, and the labor market is gradually cooling.
The Fed's silence about 2026 leaves the market without a guiding anchor.
Policymakers still forecast that interest rates could drop to around 3.4% (which means about 2 more rate cuts). But by 2027, they only see the possibility of one more cut, and in the long term, interest rates will stabilize at 3.1%.
The Fed has not provided specific guidance for the medium term. The December press release closely mirrors the content of the October meeting: the U.S. economy is growing at a moderate pace, inflation remains high, and the labor market is gradually cooling.
The Fed's silence about 2026 leaves the market without a guiding anchor.
Policymakers still forecast that interest rates could drop to around 3.4% (which means about 2 more rate cuts). But by 2027, they only see the possibility of one more cut, and in the long term, interest rates will stabilize at 3.1%.
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