"Federal Reserve Chair Jerome Powell recently "dangled uncertainty" over future interest rate cuts, indicating that a further reduction in rates in December 2025 is "far from a foregone conclusion". Following the Fed's decision to cut interest rates for the second time this year at its October 2025 meeting, Powell cautioned against assuming a continued aggressive easing path. Key aspects of his message include:"
"A "Far From" Certain December Cut: Powell explicitly stated that another rate cut at the December meeting is not guaranteed, a comment that caused stocks to turn negative while Treasury yields and the dollar jumped. Data Dependence: Powell emphasized that future decisions would be made on a meeting-by-meeting basis and depend on incoming economic data. The current federal government shutdown has delayed the release of key data sets, adding to the uncertainty and potentially arguing for caution."
The Federal Reserve cut interest rates by 25 basis points in October 2025, marking the second cut of the year. Another rate cut at the December meeting is not guaranteed and remains uncertain. Future policy decisions will be made on a meeting-by-meeting basis and will depend on incoming economic data. A federal government shutdown has delayed key data releases, increasing uncertainty and supporting a cautious approach. The October decision produced internal division with two dissenting FOMC votes, and markets reacted negatively to the cautious tone as investors had largely priced in continued cuts. The Fed emphasized managing expectations while maintaining flexibility.
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