Archive · 7 Dec 2025
Fed Likely to Cut Rates Despite Inflation Concerns
Jerome Powell, the head of the Federal Reserve, is likely to cut interest rates by a small amount this week.
This is despite some people worrying that inflation is still too high.
The decision comes after some recent economic data was delayed due to a government shutdown.
Investors are now very sure that a rate cut will happen.
After this, the Fed might wait before making more cuts in 2026.
There is also some concern about who will replace Powell as the head of the Fed, as the current frontrunner might push for more rate cuts, which could make inflation worse.
Federal Reserve Chair Jerome Powell is expected to push for a quarter-point interest-rate cut this week despite growing concerns about high inflation.
The Fed's decision comes after a sudden deterioration in the US labor market and a government shutdown that delayed economic data.
Investors are now more than 90% sure that a rate cut will happen, following a signal from New York Fed President John Williams.
Economists expect the Fed to take a break before making two more rate cuts in 2026, in March and September.
There is concern about the potential successor to Powell, Kevin Hassett, who might push for rate cuts at President Trump's direction, risking higher inflation.
- Who
- Federal Reserve Chair Jerome Powell and other policymakers
- What
- Expected quarter-point interest-rate cut despite inflation concerns
- When
- December 2025
- Where
- United States
- Why
- To address sudden deterioration in the US labor market and growing unease among policymakers
- Fed Chair
- Jerome Powell
- Expected Rate Cut
- Quarter-point
- Next Fed Meeting
- December 2025
- Potential Successor
- Kevin Hassett
- Bank of Canada Rate
- 2.25%
- Japan GDP Revision
- Deeper contraction expected
- China Inflation
- 0.7% expected in November
- Mexico Inflation
- 3.57% headline, 4.28% core