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Minutes: FOMC takes wait-and-see approach to future rate cuts

December 30, 2025
Reading Time: 2 mins read
Green Dot agrees to pay Federal Reserve $44 Million to resolve UDAP allegations.

The Federal Reserve Board of Governors building in Washington, D.C.

Most members of the Federal Open Market Committee agreed that further reduction of the federal funds rate in the near future “would likely be appropriate if inflation declined over time as expected,” according to minutes released today of the committee’s December meeting.

Regarding the extent and timing of future adjustments, however, some members recommended keeping the target range “unchanged for some time” after voting to lower the range during meeting earlier this month.

“A few participants observed that such an approach would allow policymakers to assess the lagged effects on the labor market and economic activity of the committee’s recent moves toward a more neutral policy stance while also giving policymakers time to acquire more confidence about inflation returning to 2%,” according to the minutes. “All participants agreed that monetary policy was not on a preset course and would be informed by a wide range of incoming data, the evolving economic outlook, and the balance of risks.”

The FOMC voted on Dec. 10 to lower the target range of the federal funds rate by 25 basis points, to 3.5%-3.75%. Nine members voted for the cut, while three FOMC members voted against it. Fed Governor Stephen Miran voted no, instead preferring a cut of 50 basis points. Chicago Fed President Austan Goolsbee and Kansas City Fed President Jeffrey Schmid also voted against the cut, preferring no change to the target range.

Notably during the December meeting, the FOMC also decided to begin reserve management purchases, or RMPs, which means that the Fed is expanding its balance sheet by purchasing short-term U.S. Treasurys. Members agreed that it was “appropriate to begin RMPs and initiate purchases of shorter-term Treasury securities to maintain an ample supply of reserves over time,” according to the meeting minutes. The last time the Fed engaged in RMP was 2019.

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