Full text of the Federal Reserve decision: 25 basis point rate cut, purchase of $4 billion in Treasury bills within 30 days

On December 11, the Federal Reserve lowered its benchmark interest rate by 25 basis points to 3.50%-3.75% with a 9-3 vote, marking the third consecutive meeting with a rate cut. The policy statement removed the description of the unemployment rate as "low." The latest dot plot maintains the forecast for a 25 basis point rate cut in 2026.

Additionally, the Federal Reserve will purchase $40 billion in Treasury bills within 30 days starting December 12 (UTC+8) to maintain ample reserve supply.

Full Text of the Interest Rate Decision

Available data indicate that economic activity is expanding at a moderate pace. Since the beginning of this year, job growth has slowed, and the unemployment rate has risen as of September. More recent indicators are consistent with this situation. Inflation has increased compared to the beginning of the year and remains at a relatively high level.

The Committee's long-term goal is to achieve maximum employment and 2% inflation. Uncertainty about the economic outlook remains high. The Committee closely monitors risks to both sides of its dual mandate and believes that downside risks to employment have increased in recent months.

To support these objectives and considering changes in the balance of risks, the Committee decided to lower the target range for the federal funds rate by 25 basis points to 3.50% to 3.75%. In assessing whether further adjustments to the target range for the federal funds rate are needed, and the timing and magnitude of such adjustments, the Committee will carefully evaluate the latest data, the evolving economic outlook, and the balance of risks. The Committee is firmly committed to supporting maximum employment and returning inflation to its 2% target.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the impact of the latest information on the economic outlook. If risks emerge that could impede the achievement of the Committee's goals, the Committee will be prepared to adjust the stance of monetary policy as appropriate. The Committee's judgment will take into account a wide range of information, including labor market conditions, inflation pressures and inflation expectations, as well as developments in financial and international conditions.

The Committee believes that reserve balances have declined to an adequate level and will initiate purchases of short-term U.S. Treasuries as needed to maintain ample reserve supply on an ongoing basis.

Voting in favor of this monetary policy action were: Chair Jerome H. Powell, Vice Chair John C. Williams, Michael S. Barr, Michelle W. Bowman, Susan M. Collins, Lisa D. Cook, Philip N. Jefferson, Alberto G. Musalem, and Christopher J. Waller. Voting against were Stephen I. Miran, who preferred to lower the target range for the federal funds rate by 1/2 percentage point at this meeting; and Austan D. Goolsbee and Jeffrey R. Schmid, who preferred to maintain the target range for the federal funds rate at this meeting.

Median of the Federal Reserve dot plot: 25 basis points cumulative rate cut in 2026

Decisions Regarding Monetary Policy Operations

To implement the monetary policy stance announced by the Federal Open Market Committee in its statement on December 10, 2025, the Federal Reserve has made the following decisions:

The Federal Reserve Board unanimously voted to lower the interest rate on reserve balances to 3.65%, effective December 11, 2025 (UTC+8).

As part of the policy decision, the Federal Open Market Committee voted to direct the Open Market Trading Desk at the Federal Reserve Bank of New York to execute transactions in the System Open Market Account in accordance with the following domestic policy directive until further notice:

“Effective December 11, 2025 (UTC+8), the Federal Open Market Committee directs the Desk to:

Conduct open market operations as necessary to maintain the federal funds rate in a target range of 3.50% to 3.75%.

Conduct overnight repurchase agreement operations at an offering rate of 3.75%.

Conduct overnight reverse repurchase agreement operations at an offering rate of 3.50%, with a daily limit of $160 billion per counterparty.

Increase holdings of securities in the System Open Market Account by purchasing Treasury bills and, as necessary, other U.S. Treasury securities with remaining maturities of three years or less, to maintain ample levels of reserves.

Reinvest all principal payments from Federal Reserve holdings of U.S. Treasury securities at auction. Reinvest all principal payments from Federal Reserve holdings of agency securities into Treasury bills.”

In related actions, the Federal Reserve Board unanimously voted to lower the primary credit rate by 25 basis points to 3.75%, effective December 11, 2025 (UTC+8). In taking this action, the Board approved requests submitted by the Boards of Directors of the Federal Reserve Banks of New York, Philadelphia, St. Louis, and San Francisco to establish this rate.

As the Federal Open Market Committee or the Federal Reserve Board makes decisions regarding the tools and methods used to implement monetary policy, the above information will be updated in a timely manner.