"When the US Federal Reserve meets on Dec. 9-10 to decide on interest rates, it will not be just another routine gathering. Markets are watching closely to see what direction policymakers choose. Will the Fed cut rates again before the holidays? A pre-Christmas Eve reduction could send waves through bonds, stocks, credit markets and crypto. This article explains why the Fed's pre-Christmas meeting is significant and outlines the factors supporting or opposing a potential rate cut."
"The background of a December rate cut Central banks typically cut rates when inflation is easing, economic growth slows or financial conditions become too tight. In late October, the Federal Reserve lowered rates by 25 basis points, setting the federal funds target range at 3.75%-4.00%, its lowest level since 2022. The move followed another 25-basis-point cut in September 2025, making it the Fed's second rate reduction of the year."
The Fed will meet on Dec. 9-10 to decide whether to cut interest rates again before Christmas. After two 25-basis-point cuts in 2025, the federal funds target range is 3.75%-4.00%. A cooling labor market, including large October layoffs, and softer inflation support further easing. The end of quantitative tightening and year-end liquidity needs add to the case for a reduction. Sticky inflation, gaps in economic data due to the government shutdown and a divided Fed argue for holding rates. A pre-Christmas cut would move bond, equity, credit and crypto markets, while no-change would keep financial conditions tighter.
Read at Cointelegraph
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