On December 10, the Fed announced a cut in its key rates of 25 basis points, confirming market expectations. However, behind this apparently classic decision lie deep dissensions: divergent votes, unclear economic context and unprecedented political pressures. In a context marked by the absence of key economic data due to the shutdown, reading American monetary strategy is becoming increasingly complex, and potentially destabilizing.
In brief
- The US Federal Reserve lowered its key rates by 25 basis points, placing them between 3.50% and 3.75%.
- This is the third consecutive decline since September, in an economic context marked by uncertainty.
- Two Fed members voted against the move, while another called for a deeper cut of 50 points.
- The lack of recent economic data, due to the shutdown, made decision-making particularly delicate.
An expected, but controversial decline within the Fed
The American Federal Reserve announced, this Wednesday, December 10, a further cut in its key rates of 25 basis points as the markets had anticipated, bringing the Fed Funds Rate range to 3.50% – 3.75%.
This is the third consecutive decline since September. This decision, although expected by the markets, was not unanimous within the monetary policy committee. According to the official press release, “uncertainty regarding the economic outlook remains high”and the committee “judges that the downside risks for employment have increased in recent months”.
THE internal dissensionsrarely so marked, have been made public:
- Two members voted against the rate cut: Jeffrey Schmid (Kansas City) and Austan Goolsbee (Chicago), both supporters of the status quo;
- One member, Stephen Miran, recently appointed by Donald Trump, stood out by voting for a more aggressive reduction of 50 basis points;
- This division reflects a deep disagreement on the strategy to adopt in a still unclear economic context.
This tension is also explained by the lack of up-to-date economic on-chain data, a direct consequence of the prolonged shutdown of the American government. The latest available unemployment rate, from September, is 4.4%, while inflation then reached 2.8%, above the 2% target.
Several key indicators, such as job creation and consumption data, have not been published for several weeks, leaving the Fed in a delicate position. Due to lack of visibility, some members preferred to wait, while others considered it necessary to act now to support the labor market.
A Fed under political pressure at the dawn of 2026
Beyond internal tensions, this monetary decision comes in a particularly sensitive political context.
President Donald Trump has intensified his criticism of Jerome Powell, whom he accuses of a monetary policy that is still too restrictive. Powell's term expires in spring 2026, and the White House has already launched consultations to replace him with a more accommodating profile.
According to several sources, Kevin Hassett, Trump's former economic adviser, is among the favorites. Trump makes no secret of the fact that he expects the future head of the Fed to pursue a more accommodating policy. This growing politicization of the central bank fuels concerns about the future independence of the institution.
At the same time, the composition of the FOMC will evolve in 2026: four new voters from regional banks will join the committee, according to the usual rotation system. This renewal could modify the internal balance of the debates, especially if profiles more favorable to low rates) are named or put forward by the executive.
In the economic projections published this Wednesday, the Fed only anticipates one rate cut for the year 2026, while the markets expect two. This divergence between the institution's discourse and market expectations accentuates uncertainty, particularly for investors seeking visibility.
The Fed is resisting Trump and maintaining its line despite political pressure. By opting for a measured decline, it asserts its independence while sparing the markets. It remains to be seen whether this posture will hold up in the face of the economic tensions of 2026 and the growing expectations of investors.
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