December FOMC Meeting: Date, Agenda, and Interest Rate Cut Expectations

The Federal Open Market Committee (FOMC) is expected to hold its final policy meeting for 2025 on December 9-10. This will bring to a close a challenging year for the Federal Reserve, marked by persistent inflation, a slowing job market, and growing uncertainty about the economy’s direction. On Wall Street, investors are watching closely to see what Fed Chair Jerome Powell will do next. The big question is whether he’ll announce one last Fed rate cut before the year ends, or decide to hold steady as the economy shows signs of strength despite global tensions and renewed tariff pressures.

FOMC Meeting: Official Date and Schedule

According to the Federal Reserve’s official calendar, the FOMC holds eight policy meetings each year. The next and final meeting will convene in December 2025. The two-day session is set to begin on Tuesday, December 9, and conclude on Wednesday, December 10. 

The committee’s policy statement will be released at 2:00 p.m. ET, followed by Fed Chair Jerome Powell’s press conference at 2:30 p.m. ET. This meeting will also feature the quarterly Summary of Economic Projections (SEP), the closely watched dot plot, and updated plans for the Fed’s balance sheet.

This is the reason it is one of the most anticipated events on the financial calendar right now

FOMC Meeting Key Agenda Items

The primary items on the FOMC meeting agenda include:

1. Interest Rate Decision:
   Currently, the Fed rate cut is between 3.75% and 4.00% following a 25-basis-point cut in October. Policy makers will weigh how a softer job market stacks up against inflation that remains stubbornly close to 3%.
2. Economic Projections and Dot Plot:
   The Fed plans to share new forecasts for growth, unemployment, and inflation up to 2028. While Jerome Powell hinted at more Fed rate cuts this year, recent data has made this view less clear. Some members argue that easing too fast might cause inflation to rise again, while others believe the economy’s slowdown requires more intervention.
3. Balance Sheet Update:
   The Fed is expected to stop its quantitative tightening program on December 1. Instead of shrinking its balance sheet further, it will redirect maturing mortgage-backed securities into Treasury bills. The objective of this step is to maintain liquidity in financial markets without expanding overall holdings.

Fed Rate Cut Expectations: A Coin Flip

According to the CME Group’s FedWatch Tool, which tracks futures prices to gauge market expectations, there is a high likelihood that the coming December meeting will see the Federal Reserve cut interest rates by 25 basis points. As of November 10, 2025, the data shows a 64.9% chance that the Fed cut will fall from the current 3.75%-4.00% to 3.50%-3.75%.

On the other hand, there is a 35.1% likelihood that the Fed will hold rates steady. While the majority of investors are confident, it can’t be compared to October 10, which recorded over a 90% probability of the Fed cutting rates.

The shift reflects several key factors:

1. Powell’s cautious approach: Fed Chair Jerome Powell said a December cut is not a sure thing, noting very different opinions within the committee.
2. October disagreement: Two members, Stephen Miran and Jeffrey Schmid split on October’s 25-basis-point cut. Miran favored a larger 50-basis-point move, while Schmid argued for no cut at all.
3. Relying on data: Economic information has made things less clear. The economy has grown more than expected, and new tariffs have pushed inflation up, while job growth keeps slowing down.

Analysts remain split. Goldman Sachs still expects a modest cut as a safeguard against labor market weakness. On the other hand, Oxford Economics believes the Fed could pause if inflation shows signs of picking up again.

Final Thoughts: What’s at Stake?

A December  Fed rate cut would bring some relief to borrowers. Mortgage costs, which are currently around 6.8% could be lowered, together with those for credit cards and auto loans. But if the Fed decides to hold rates instead, the dollar could strengthen while stocks face renewed pressure. With so much uncertainty in play, markets will be listening closely to Powell’s tone on the outlook for 2026. As one Fed watcher put it, “The era of predictable cuts is over data will dictate every move.”