The Federal Reserve on Wednesday approved a much-anticipated quarter percentage point interest rate cut at a meeting that was packed with intrigue and surprises. Here’s a look at five top takeaways:
“Given the lack of consensus on the Committee displayed today, along with the slow release of traditional economic data, and the arrival of a new Fed Chair early in 2026, we think the Fed is likely to remain on hold for a while. Still, continued softness in some of the labor indicators can certainly bring another 25 bps cut into the mix for January.” — Rick Rieder, head of fixed income at BlackRock and a reported finalist to succeed Powell
“The Fed’s guidance probably tells us less than usual about the interest rate outlook, for two big reasons. First, they know less than usual about the current state of the economy because the shutdown delayed the release of economic statistics. Second, the Fed’s guidance doesn’t account for how its approach will change after Chair Powell’s term ends in May. In 2026, the Fed seems more likely to cut rates by more than signaled in the December Dot Plot than by less.” — Bill Adams, chief economist, Comerica Bank
“The Fed lifted its expectations of growth next year which, along with the increase in cash to American households via changing tax policy, will create doubt about the path of monetary policy. This dynamic in our estimation substantially lifts the bar on any prospective rate cut at the Fed’s next meeting in January.” — Joseph Brusuelas, chief economist, RSM
