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The Federal Reserve cut interest rates for the third consecutive time and expanded the scale of short-term bond purchases, causing U.S. Treasury yields to fall on Wednesday. The yield on the two-year bond dropped by 6.9 basis points to 3.544%. The yield on the ten-year bond fell by 3.1 basis points to 4.155%. The yield on the thirty-year bond decreased by 1.5 basis points to 4.794%

AASTOCKS

"Bond Market": The Federal Reserve cuts interest rates and expands bond-buying scale, U.S. Treasury yields decline

The Federal Reserve cut interest rates by 25 basis points to 3.50%-3.75% in a 9-3 vote, with three members dissenting for the first time in six years. Fed Chairman Jerome Powell emphasized this is not the start of an easing cycle, but a move towards a neutral rate. The market reacted positively, with major indexes rising. However, Kevin Hassett's unexpected comments earlier in the week caused a spike in the 10-year Treasury yield, highlighting market uncertainties.

InvestorPlace

The Fed Cuts – Will the Bond Market Finally Listen?

Producers of metals and other raw materials rose as the U.S. dollar weakened following a Federal Reserve rate cut to 3.5%-3.75%. The Fed hinted at a pause in rate cuts but did not rule out more cuts in January. Silver futures hit a record high, gaining 0.4% to $60.38 per troy ounce.

marketscreener

Materials Up as U.S. Dollar Slides - Materials Roundup

Federal Reserve Chair Jerome Powell indicated a potential pause in interest rate cuts after the FOMC reduced rates to 3.5%-3.75% in December 2025. Powell suggested rates might be neutral, making a January cut less likely. The FOMC's decisions remain data-dependent, with upcoming economic reports influencing future actions. Non-economic factors, such as Supreme Court rulings on tariffs and Fed leadership changes, may also impact 2026 interest rates.

Forbes

Powell Signals Possible Pause In Interest Rate Cuts For Now

Trump says he is meeting with Kevin Warsh about the Federal Reserve

Trump says he is meeting with Kevin Warsh about the Federal Reserve

The Federal Reserve's December projections are optimistic, forecasting economic resilience, 2% inflation, and elevated interest rates through 2027. Despite a quarter-point rate cut, the Fed expects only two more cuts by 2027, with a long-term neutral rate around 3.0%. GDP growth is upgraded to 2.3% for 2026, and unemployment is projected to remain low. This suggests a soft landing with moderated inflation and stable employment. However, higher rates will persist due to a revised understanding of the neutral rate, impacting mortgage, credit card, and business loan rates.

Invezz

What does the Fed see ahead? Higher rates through 2027, 2.4% inflation, soft landing growth

According to ChainCatcher, Federal Reserve Chairman Jerome Powell has affirmed the central bank's dedication to achieving a 2% inflation target. However, he acknowledged that the labor market is experiencing pressures.

CoinLive

Federal Reserve's Commitment to Inflation Target Amid Labor Market Challenges

Federal Reserve Chair Jerome Powell announced that the policy rate is now within a neutral range after recent rate cuts, allowing the FOMC to observe economic developments. The federal funds rate target was lowered by 25 basis points to 3.50%-3.75%. The FOMC plans to purchase shorter-term Treasury securities to maintain reserve balances. The Summary of Economic Projections remains unchanged, with a median forecast of one rate cut in 2026 and 2027. Powell emphasized the balance between employment and inflation goals.

fidelity

Fed 'Well-Positioned' After Neutral-Range Rate Cut, Powell Says

The Federal Reserve cut the federal funds rate by 25 bps to 3.50%-3.75%, with a 9-3 vote. The dissent raises uncertainty about future cuts, with CME's FedWatch tool showing a 73.4% chance of unchanged rates in January. The Fed's 2026 median rate forecast remains at 3.4%, with labor and inflation risks influencing decisions. Fed Chair Powell emphasized a meeting-to-meeting approach due to heightened employment and inflation risks.

Tip Ranks

The Fed Just Cut Rates. Will it Cut Again Next Month?

The Federal Reserve cut its benchmark lending rate by 25 basis points to 3.50%-3.75% amid labor market concerns. This marks the third consecutive rate cut, reflecting slowed job gains and rising unemployment. Three FOMC members dissented, highlighting policy path disagreements. The recent government shutdown delayed key economic reports, affecting the Fed's data-dependent stance. The Fed noted moderate economic expansion and elevated inflation, with future rate adjustments dependent on incoming data and risk assessments. The next FOMC meeting is scheduled for Jan. 27-28.

- The Federal Reserve lowered its benchmark lending rate by 25 basis points to a range of 3.50% to 3.75% due to concerns about the labor market.  
- The decision aligns with Wall Street's expectations and follows a trend of rate cuts amid rising unemployment and slowed job gains.  
- The FOMC noted a divide among its members regarding future policy, influenced by recent economic data and the impact of a prolonged government shutdown.

Fed Cuts Rate by 25 Basis Points as Labor Market Worries Persist

The Federal Reserve announced a quarter-point rate cut, lowering the federal funds rate to 3.50-3.75%. This marks the third consecutive cut. However, there were dissenting votes among Fed officials, with some preferring a larger cut or no change. The Fed's economic projections show divided views on future rates. The next policy meeting is in January, with a high chance of rates remaining unchanged.

- The Federal Reserve announced a quarter-point interest rate cut, lowering the target range to 3.50 to 3.75 percent.  
- While most officials supported the cut, three dissenting votes were cast, indicating divisions on future rate adjustments.  
- The Fed's projections suggest one more rate cut next year, with varying expectations among officials regarding rates by the end of 2026, as they balance employment and inflation goals.  