In the early hours of December 11 Beijing time, the Federal Reserve cut the federal funds rate by 25 basis points to 3.50%-3.75% as expected. This marks the third rate cut this year and the sixth in the current easing cycle. Notably, the decision saw an unusual three dissenting votes, the first since 2019, highlighting deepening internal divisions.

The dissenting camp is split into two factions: Governor Milan advocated for a 50-basis-point rate cut in one go to stabilize employment, while the other two officials favored keeping rates unchanged to tackle inflation. The dot plot shows divided expectations among officials regarding rate cuts in 2026—7 officials advocate for a pause, while 8 support at least two more cuts. Markets reacted positively to the “dovish signals”: the Dow Jones Industrial Average rose 1.05%, the S&P 500 Index climbed 0.67%, and silver hit a record high. Powell emphasized that there is no fixed path for policy, and currently, no one regards interest rate hikes as the baseline expectation.