Fed's Interest Rate Cut: Divided Policymakers, Positive Market Reaction
Update: 2025-12-11
Description
The Federal Reserve recently cut interest rates by a quarter percentage point, a move that was both anticipated and surprising due to internal disagreements among policymakers. Despite the cautious tone, financial markets reacted positively, with stocks gaining and Treasury yields declining. The vote was nine to three, with three dissenting votes, the most since September 2019. Some officials wanted a larger cut, while others preferred to keep rates unchanged. The dot plot remained consistent, suggesting only two more cuts in the next few years. The Fed also announced it will resume buying short-term bills, a move that could benefit riskier assets.
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