⚡️🇺🇸 NEW - The Federal Reserve just cut rates by 25 bps.
The vote wasn’t close: 9 backed the cut, 2 opposed it, and 1 wanted a deeper 50 bps move.
Their outlook signals a slow path ahead, with one more 25 bps cut penciled in for 2026 and another in 2027.
➥ Summary of Jerome Powell's remarks:
The outlook for employment and inflation has changed little since the last meeting.
🔸 Inflation remains too high, with upside risks in the near term.
🔸 Little new inflation data has been released recently, and several indicators may be distorted due to collection issues in October and November.
🔸 Goods inflation has risen, accounting for higher readings.
🔸 The housing sector remains weak and faces structural challenges (lack of construction, unchanged affordability even with modest rate cuts).
🔸 The Fed believes that the economy is not overheating and that growth remains solid, with an upward revision to GDP for 2026.
🔸 Powell indicates that job creation has likely been overestimated (by about 60,000), and that current figures may mask a true pace of around -20,000 jobs per month.
🔸 Households are suffering from rising costs, and the Fed clearly understands these difficulties.
🔸 Key interest rates are now within a plausible range of neutrality, closer to the upper end.
🔸 Monetary policy is not on a predefined course; decisions will be made meeting by meeting.
🔸 The Fed says it is "well positioned to wait and see" how the economy evolves, particularly ahead of the January meeting, when a large volume of data will be available.
🔸 The scenarios considered by members range from maintaining rates to lowering them; no increase is considered a baseline scenario.
🔸 Powell describes the upcoming decision as close, indicating that he could defend several options.
🔸 AI-related spending continues and supports part of economic activity.
🔸 Powell reaffirms that the Fed will achieve 2% inflation and that, excluding the one-off effect of tariffs, inflation is already in the low 2% range.
