Fed set to cut interest rates for third time this year, 2026 forecast in focus

Myles Udland

The Federal Reserve’s final meeting of the year is set to begin on Tuesday morning, Dec. 9, with the central bank scheduled to announce its final monetary policy decision at 2:00 p.m. ET on Wednesday afternoon.

Investors expect the Fed will cut rates by 0.25%, its third cut of the year, at the conclusion of its two-day meeting, with data from the CME Group showing a 90% chance the central bank will cut rates this week.

Along with its final policy decision of the year, the Fed will also publish its final Summary of Economic Projections (SEP) for 2025, which includes forecasts from Fed officials on economic growth, inflation, and interest rates for the coming years.

In September, the SEP showed the Fed’s median forecasts calling for just one interest rate cut in 2026 following three reductions in 2025. Changes to this outlook will be top of mind for investors on Wednesday.

Investors will also be closely watching for further disagreement among Fed officials, as October’s policy statement revealed two members of the FOMC voted against the decision to lower rates by 0.25%.

LIVE 1 update

  • Myles Udland

    The Fed’s final meeting of 2025 is about one word: dissent

    The Federal Reserve’s eventful 2025 wraps up this week, and another 0.25% rate cut is expected.

    But the real drama in the central bank’s release will be in how much agreement, or not, there is with this decision.

    As Yahoo Finance’s Jennifer Schonberger noted in her preview of the event, at least three regional Fed presidents have signaled that the case for cutting rates this week does not appear obvious. One of those includes Kansas City Fed president Jeff Schmid, who voted against October’s rate cut.

    Add in that Fed Governor Stephen Miran has twice dissented in favor of a larger rate cut, the central bank could be looking at upward of four votes against the expected decision to lower rates by another 0.25% on Wednesday.

    Read Jennifer’s full preview of the meeting here.

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