Fed Policy Meet: In its December 2025 meeting, the Fed cut interest rates for the third consecutive time. The overnight lending rate was reduced by 0.25 percent. Jerome Powell’s tenure as Chairman of the Federal Reserve officially concludes in May of this year.
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Fed Policy Meet: The US central bank, the Federal Reserve, kept interest rates unchanged at its April meeting, citing concerns about rising inflation. This marks the third consecutive time the benchmark overnight interest rate has been left unchanged at a Federal Open Market Committee (FOMC) meeting. Previously, benchmark interest rates were kept unchanged in the 3.50-3.75% range at the January and March meetings.
The Fed cut rates for the third consecutive time at its December 2025 meeting. The overnight lending rate was cut by 0.25 percentage points, bringing the rate to a range of 3.50-3.75%. Previously, the overnight borrowing rate was cut by 0.25 percentage points each at the October and September meetings.
Jerome Powell intends to remain as Governor.
This could be the final FOMC meeting with Jerome Powell serving as the Fed Chair. His term officially concludes in May of this year. However, he has stated that he will remain in the position of Governor as long as legal threats to the Fed persist. His term as a Board member is set to expire in January 2028. He aims to safeguard the Federal Reserve’s independence against attacks from the U.S. Trump administration. According to Reuters, following the conclusion of the policy meeting, Powell remarked that he intends to maintain a low profile as a Governor. He has no intention of acting as a high-profile adversary who might pose an obstacle to his successor, Kevin Warsh.
Kevin Warsh has been nominated to lead the Fed following Powell. On Wednesday, the Senate Banking Committee approved his nomination, and it could be confirmed by the full Senate within just two weeks.
Decline in US Markets
US stock markets declined following the decisions from the Federal Reserve meeting. The S&P 500 fell 0.4 percent, the Dow Jones 0.8 percent, and the Nasdaq Composite 0.4 percent. In the US, yields on 10-year bonds rose by 6 basis points to 4.41 percent. The Dollar Index climbed 0.4 percent to reach 98.95.
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