Latest Finance-Economy News
Federal Reserve Lowers Federal Funds Rate by 0.25%
The Federal Open Market Committee (FOMC) announced a 25 basis point cut to the federal funds rate, reducing the target range to 3.50%-3.75%. This decision responds to moderately expanding economic activity, slower job gains, and elevated inflation above 2%. The Fed stated it will carefully monitor data and adjust as needed to support employment and control inflation.
Implementation Details of Fed's Monetary Policy Adjustments
Effective December 11, 2025, the Fed will maintain the new target federal funds rate via open market operations, including standing overnight repos at 3.75% and reverse repos at 3.5%, with no aggregate operational limit. The Fed will increase System Open Market Account Treasury holdings to maintain ample reserves, and lower the interest paid on reserve balances to 3.65%.
Fed Rate Cut Sparks Market Rally Despite Dissent
Following the Fed's third consecutive rate cut, stocks rose sharply with the S&P 500 nearing a record close and the Dow jumping nearly 500 points. Fed Chair Powell emphasized economic stability, despite acknowledged dissent within the FOMC and concerns about a sluggish labor market. Inflation remains slightly above the 2% goal, with tariffs cited as a contributing factor.
Federal Reserve's Cautious Outlook on Job Market and Inflation
The Fed noted that job gains have slowed and unemployment edged up through September but remains relatively low. Inflation has increased since earlier in the year and remains somewhat elevated. The Committee highlighted elevated uncertainty and risks to employment, signaling readiness to adjust policy in response to incoming data.
Fed's Reserve Management Purchases to Maintain Ample Reserves
The Fed plans monthly Treasury bill purchases, starting with approximately $40 billion on December 12, 2025, to offset seasonal fluctuations and growth in demand for liabilities. This effort aims to maintain adequate reserves to support monetary policy implementation.
Third Straight Fed Rate Cut Signals Shift Towards Neutral Policy
The December meeting marked the Fed's third straight rate cut in 2025 amid falling inflation risks and concerns over slowing economic activity. Analysts note the Fed might continue lowering rates to reach a neutral stance given risks of deflation and consistent but sluggish job market conditions.
OCC Releases Preliminary Review of Large Banks’ Debanking Activities
The Office of the Comptroller of the Currency (OCC) published preliminary findings on large banks' debanking practices. The report, released December 10, 2025, assesses risks and regulatory compliance but detailed results are pending further analysis.
AMSC Expands Business and Product Portfolio with Acquisition in Brazil
AMSC announced the acquisition of Comtrafo, expanding its product offerings in the utility and industrial sectors and entering the Brazilian market. The acquisition is expected to boost revenue and earnings, positioning AMSC for growth in Latin America.
Fed Board Lowers Primary Credit Rate to 3.75%
In coordination with the FOMC decision, the Federal Reserve Board of Governors unanimously approved lowering the primary credit rate by 25 basis points to 3.75%, effective December 11, 2025. This rate influences borrowing costs for banks through the discount window.
Fed's Monetary Policy Reflects Elevated Uncertainty and Vigilance
The Fed continues to emphasize the balance of risks in its dual mandate of maximum employment and 2% inflation, highlighting ongoing attention to financial and international developments that may impact economic outcomes. The Committee commits to responsiveness in policy adjustments based on new data.