US Fed meeting: Jerome Powell-led FOMC announces third consecutive rate cut | 5 important highlights

US Fed meeting: The US Federal Reserve’s Federal Open Market Committee (FOMC) decided after its two-day policy meeting to cut the key interest rate by 25 basis points to a range of 3.50% to 3.75%, according to the official statement released on Wednesday, December 10, 2025. The Fed’s December rate cut is the third consecutive US interest rate cut that began in September. 2025. The Federal Reserve cut a total of 75 basis points in 2025, after keeping interest rates unchanged from December 2024. 5 key highlights from US Fed’s policy decision Here are five key highlights from the US Federal Reserve’s policy decision and Chairman Jerome Powell’s December 10 speech December 10, 2025, Federal Reserve cut interest rates: Powell-led FOMC cut key benchmark interest rates by 25 basis points to a range of 3.50% to 3.75%, as the central bank tries to wait for upcoming US economic data to determine the interest rate trajectory in the coming year. Nine of the 12 members voted in favor of the Fed’s policy decision to cut interest rates, while one of the remaining three was looking for a 50 basis point rate cut, and the other two wanted to keep interest rates unchanged at their previous levels. “In support of its objectives and in light of the shift in the balance of risks, the committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 3-1/2 to 3-3/4 percent,” the FOMC said. 2. Is there going to be a rate cut? Looking at the interest rate trajectory, Fed Chairman Jerome Powell said that the central bank will either hold interest rates or cut them in the upcoming Fed meeting next year as the Fed now enters a wait-and-see mode for upcoming economic data. In his speech, Powell rejected the proposition that the central bank does not want to raise its key interest rates anytime soon amid the overall move closer to neutral, in line with its dual mandate. “I don’t think that a rate hike is anybody’s base, because the next thing is anybody’s base case at this point, I don’t hear it. What you’re seeing is that some people feel we need to stop here and that we’re in the right place and just waiting,” Powell said. 3. Inflation Concerns Although the US Fed cut interest rates for the third time on December 10, 2025, the rate cut from 25 basis points to 3.50% to 3.75% interest rates comes amid increased inflation levels in the US economy and a slowing labor market. “Jobs have slowed this year, and the unemployment rate has risen through September. More recent indicators are consistent with these developments. Inflation has moved up since earlier in the year and remains somewhat elevated,” the FOMC said. The central bank reiterated its focus on the dual mandate of maximizing employment while bringing inflation levels down to its 2% target. However, the rate cut comes amid September 2025 employment data released in November, which indicated the unemployment rate rose to 4.4% in the period, while the country added 119,000 jobs despite the government shutdown. 4. Downside risk for labor market? The US labor market and employment have faced downside risks in recent months as the US Fed acknowledged the risk from both inflation and the labor market side of its dual mandate. “The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer term. Uncertainty about the economic outlook remains high. The Committee is attentive to the risks on both sides of its dual mandate and judges that downside risks to employment have increased in recent months,” the Fed said in its policy announcement. The move for interest rate relief is aimed at stabilizing the labor market as inflation resumes its downward trend towards the 2% target after the effects of the rates wear off. However, Chairman Powell also emphasized that unemployment rates in the US economy could reach 4.5% by the end of 2025, as the downside risk to employment appears to have increased in recent months. 5. US reserves in focus The US Federal Reserve has emphasized that reserve balances have fallen, and the central bank is now looking to buy short-term bonds in an effort to maintain an ample supply of reserves on an ongoing basis. “The committee judges that reserve balances have fallen to ample levels and will initiate purchases of short-term Treasury securities as necessary to maintain an ample supply of reserves on an ongoing basis,” the US Fed said. All eyes will now be on the upcoming US economy data release to possibly gauge the outcome of the Federal Reserve’s first policy decision of 2026. Read All Stories by Anubhav Mukherjee Disclaimer: This story is for educational purpose only. The opinions and recommendations expressed are those of individual analysts or brokerage firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.