Fed Cuts to 3.50–3.75%; SEP Projects 2.3% GDP 2026

The FOMC cut rates by 25 basis points to 3.50–3.75% with a 9-3 vote — the three dissenters being two who wanted to hold (concerned about inflation) and one who wanted a larger cut. The December SEP projected GDP at 1.7% for 2025 and 2.3% for 2026; unemployment at 4.5% (2025) and 4.4% (2026); PCE at 2.9% (2025) and 2.4% (2026). The median dot plot showed the fed funds rate falling to 3.4% by end-2026.