December 10, 2025
October 29, 2025
Jerome H. Powell
December 10, 2025 FOMC Statement
FOMC statement
Federal Reserve issues FOMC statement
For release at 2:00 p.m. EDT EST
Available indicators suggest that economic activity has been expanding at a moderate pace. Job gains have slowed this year, and the unemployment rate has edged up but remained low through August; more September. More recent indicators are consistent with these developments. Inflation has moved up since earlier in the year and remains somewhat elevated.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment rose in recent months.
In support of its goals and in light of the shift in the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 3-3/4 3-1/2 to 4 3‑3/4 percent. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee decided to conclude the reduction of its aggregate securities holdings on December 1. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.
The Committee judges that reserve balances have declined to ample levels and will initiate purchases of shorter-term Treasury securities as needed to maintain an ample supply of reserves on an ongoing basis.
Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Susan M. Collins; Lisa D. Cook; Austan D. Goolsbee; Philip N. Jefferson; Alberto G. Musalem; and Christopher J. Waller. Voting against this action were Stephen I. Miran, who preferred to lower the target range for the federal funds rate by 1/2 percentage point at this meeting, meeting; and Austan D. Goolsbee and Jeffrey R. Schmid, who preferred no change to the target range for the federal funds rate at this meeting.
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Implementation Note issued October 29, December 10, 2025
Our summary
What changed
- The FOMC lowered the federal funds rate target range by 1/4 percentage point to 3-1/2 to 3-3/4 percent.
- The statement now refers to 'the extent and timing' of additional adjustments, rather than just 'additional adjustments.'
- The FOMC announced it will initiate purchases of shorter-term Treasury securities as needed to maintain ample reserves, replacing the prior plan to conclude balance sheet reduction on December 1.
- The unemployment rate reference was updated from 'through August' to 'through September.'
- The vote changed: Austan D. Goolsbee joined Jeffrey R. Schmid in dissenting, preferring no change, while Stephen I. Miran continued to prefer a 1/2 percentage point cut.
Implications
The shift from concluding balance sheet reduction to initiating reserve management purchases signals a new phase of balance sheet policy focused on maintaining ample reserves.
The language on 'extent and timing' suggests the FOMC is emphasizing a more gradual, data-dependent approach to future rate adjustments.
The addition of a second dissenter preferring no change may indicate growing internal disagreement about the pace of easing.
Summary generated automatically from the statements. Not investment advice.
Projections
| 2025 | 2026 | 2027 | 2028 | Longer run | |
|---|---|---|---|---|---|
| Real GDP growth | 1.7 was 1.6 | 2.3 was 1.8 | 2.0 was 1.9 | 1.9 was 1.8 | 1.8 |
| Unemployment rate | 4.5 | 4.4 | 4.2 was 4.3 | 4.2 | 4.2 |
| PCE inflation | 2.9 was 3.0 | 2.4 was 2.6 | 2.1 | 2.0 | 2.0 |
| Core PCE inflation | 3.0 was 3.1 | 2.5 was 2.6 | 2.1 | 2.0 | |
| Federal funds rate | 3.6 | 3.4 | 3.1 | 3.1 | 3.0 |
Median projections of FOMC participants; previous: September.
Each dot is one participant's projection of the federal funds rate (%) at the end of each year and in the longer run.
December September median September median
Scroll the chart sideways for the later years.
Implementation Note
The settings that put the decision into effect: the interest rate paid on reserves, the FOMC's instructions to the New York Fed's trading desk, and the discount rate. Changes are marked the same way as in the statement.
- The Board of Governors of the Federal Reserve System voted unanimously to lower the interest rate paid on reserve balances to
3.903.65 percent, effectiveOctober 30,December 11, 2025. - As part of its policy decision, the Federal Open Market Committee voted to direct the Open Market Desk at the Federal Reserve Bank of New York, until instructed otherwise, to execute transactions in the System Open Market Account in accordance with the following domestic policy directive: "Effective
October 30,December 11, 2025, the Federal Open Market Committee directs the Desk to: - Undertake open market operations as necessary to maintain the federal funds rate in a target range of
3-3/43-1/2 to43-3/4 percent. - Conduct standing overnight repurchase agreement operations at a rate of 3.75 percent.
- Conduct standing overnight reverse repurchase agreement operations
with a minimum bidat an offering rate of4.03.5 percent and withan aggregate operationa per-counterparty limit of$500 billion.$160 billion per day. - Increase the System Open Market Account holdings of securities through purchases of Treasury bills and, if needed, other Treasury securities with remaining maturities of 3 years or less to maintain an ample level of reserves.
- Roll over at auction
the amount ofall principal payments from the Federal Reserve's holdings of Treasurysecurities maturing in October and November that exceeds a cap of $5 billion per month. Redeem Treasury coupon securities up to this monthly cap and Treasury bills to the extent that coupon principal payments are less than the monthly cap. Beginning on December 1, roll over at auctionsecurities. Reinvest all principal payments from the Federal Reserve's holdings of agency securities into Treasurysecurities.bills." - In a related action, the Board of Governors of the Federal Reserve System voted unanimously to approve a 1/4 percentage point decrease in the primary credit rate to
4.03.75 percent, effectiveOctober 30,December 11, 2025. In taking this action, the Board approved requests to establish that rate submitted by the Boards of Directors of the Federal Reserve Banks ofBoston,New York, Philadelphia,Richmond, Atlanta, Chicago, Dallas,St. Louis, and San Francisco. Conduct standing overnight reverse repurchase agreement operations at an offering rate of 3.75 percent and with a per-counterparty limit of $160 billion per day.Reinvest the amount of principal payments from the Federal Reserve's holdings of agency debt and agency mortgage-backed securities (MBS) received in October and November that exceeds a cap of $35 billion per month into Treasury securities to roughly match the maturity composition of Treasury securities outstanding. Beginning on December 1, reinvest all principal payments from the Federal Reserve's holdings of agency securities into Treasury bills.Allow modest deviations from stated amounts for reinvestments, if needed for operational reasons."
Press conference
December 10, 2025, 2:30 p.m. ET · Read the transcript
What Powell said that the statement didn't
- The chair said the federal government shutdown likely weighed on economic activity in the current quarter, with effects mostly offset by higher growth next quarter.
- The chair said the median SEP projection for real GDP growth is 1.7 percent this year and 2.3 percent next year, with the shutdown accounting for two-tenths of the difference.
- The chair said the median SEP projection for the unemployment rate is 4.5 percent at the end of this year, edging down thereafter.
- The chair said the median SEP projection for total PCE inflation is 2.9 percent this year and 2.4 percent next year, falling to 2 percent thereafter.
- The chair said reserve management purchases will amount to $40 billion in the first month, potentially remaining elevated for a few months before declining.
Summary generated automatically from the transcript and the statement.