Chicago – December 10, 2025
The Federal Reserve has cut its benchmark interest rate again and signaled growing confidence that the U.S. economy will strengthen next year, even as inflation continues to edge closer to its target range.
Fed delivers third straight cut
At its latest policy meeting, the Fed reduced its key short-term rate by a quarter percentage point, marking the third consecutive cut this year and bringing the benchmark to roughly 3.6%, the lowest level in nearly three years. The decision aims to support economic growth amid cooling job gains and lingering global uncertainties, while keeping borrowing costs lower for consumers and businesses.
Healthier outlook for 2026
Fed officials also released updated projections pointing to slightly faster growth and a modest uptick in inflation next year, suggesting confidence that the economy can avoid a recession. Policymakers see unemployment holding near current levels as hiring stabilizes, indicating that further rate reductions are not guaranteed and future moves will depend on incoming data.
