Federal Reserve Lowers Interest Rates This Week... But It May Be the Last for the Medium Term

The Fed is set for a third rate cut, but divisions may halt future cuts due to inflation concerns, impacting markets and borrowing costs.

EcoPulse24 News Desk By EcoPulse24 News Desk Published: 12/10/2025, 11:07:52 UTC Updated: 12/12/2025, 12:03:04 UTC
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Federal Reserve Lowers Interest Rates This Week... But It May Be the Last for the Medium Term
Fed Cuts Rates Again, But Future Cuts in Doubt
Bloomberg reports that U.S. Federal Reserve officials are expected to decide on a third consecutive interest rate cut on Wednesday, but this reduction may be the last for some time due to deep divisions within the central bank regarding ongoing inflation concerns.
This cut comes amid sharp divisions among members of the Federal Open Market Committee, where concerns about rising inflation prevent indications of further cuts in early 2026. Federal Reserve Chair Jerome Powell is involved in the decision-making process, with expectations that he will emphasize the need for "vigilance" regarding inflationary pressures that remain above the 2% target.Decision Day Guide
  • Main expectation: A quarter-point (0.25%) cut, bringing the federal funds rate to between 4.25% and 4.50%, as part of a series of three cuts.
  • Internal division: Some members see ongoing inflation as a reason to halt cuts, while others call for caution regarding slowing economic growth.
  • Market implications: This cut may signal the end of an easy return period, increasing trading volatility in stocks and putting pressure on household disposable income, with expectations of rising borrowing costs next year.
This meeting is crucial for determining the trajectory of monetary policy in the United States, as Powell is expected to highlight the balance between supporting the economy and combating inflation in his post-announcement press conference, which may impact global markets and increase pressures on emerging economies.
Sources & References
Bloomberg
Editorial Note
Edited & Reviewed by the Ecopulse Editorial Board 12/12/2025, 12:03:04 UTC
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