Fed meeting live coverage: Federal Reserve cuts interest rates by 0.25%, Powell says there's 'no risk-free path'

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Myles Udland and Grace O'Donnell

Updated Wed, December 10, 2025 at 9:05 PM PST 1 min read

The Federal Reserve cut interest rates by 25 basis points at the conclusion of its two-day meeting on Wednesday, marking the central bank's third cut of the year.

Fed officials were split on the decision to lower rates to a range of 3.50%-3.75%, with policymakers dissenting on both sides. Chicago Fed president Austan Goolsbee and Kansas City Fed president Jeff Schmid favored holding rates steady, while Fed governor Stephen Miran favored a 50 basis point rate cut.

US stocks rallied in the wake of the decision, with the S&P 500 (^GSPC) closing just off its record high and the small-cap Russell 2000 (^RUT) reaching an all-time high.

At the press conference, Fed Chair Jerome Powell underscored that the Fed remains in a "challenging" position, with both sides of its dual mandate in tension.

Along with its final policy decision of the year, the Fed also published its final Summary of Economic Projections (SEP) for 2025, which includes forecasts from Fed officials on economic growth, inflation, and interest rates for the coming years.

The SEP showed the Fed's median forecasts calling for one interest rate cut in 2026, in line with the projections made in September.

Here are the latest updates and analysis on the Fed's policy decision.

LIVE 39 updates

• Featured

  Today at 11:42 AM PST

  Grace O'Donnell

  Powell: 'There is no risk-free path'

  Fed Chair Powell reiterated that the Fed has tilted the balance of its risk-management framework toward the labor market after previously favoring the inflation mandate.

  "There is no risk-free path for policy as we navigate this tension between our employment and inflation goals," Powell said in his prepared remarks.

  "A reasonable base case is that the effects of tariffs on inflation will be relatively short-lived, effectively a one-time shift in the price level," he continued. "Our obligation is to make sure that a one-time increase in the price level does not become an ongoing inflation problem, but with downside risks to employment having risen in recent months, the balance of risks has shifted."

• Today at 9:05 PM PST

  Grace O'Donnell

  When will mortgage rates go down? Outlook after the Fed meeting.

  Yahoo Finance contributor E. Napoletano reports:

  Mortgage rates have decreased for the second straight week, according to Freddie Mac. The Federal Reserve also just cut the federal funds rate by 25 basis points for the third time this year. So, will mortgage rates continue to go down, making 2026 the year to buy a house?

  ... While short-term lending rates closely follow the fed funds rate, mortgage rates more closely follow the 10-year Treasury yield. As of Dec. 10, the 10-year Treasury yield opened at 4.20% — down from 4.23% a year prior.

  You’re probably wondering why today’s mortgage rates aren’t in the 4% range, right?

  To determine current mortgage rates, lenders add a “spread” to the 10-year Treasury yield. The spread is simply the difference between the rates consumers pay and the rate on the 10-year Treasury. Without getting too much into the weeds, charging a spread helps mortgage lenders cover costs associated with making loans to the public and the risk of providing such loans.

  For example, the current average 30-year fixed mortgage rate is 6.19%, and the 10-year Treasury yield is 4.20% — a spread of 1.99%. A year ago, the 30-year rate was 6.69%, and the 10-year yield was 4.23%, resulting in a spread of 2.46 percentage points. Today’s spread is smaller, which is one reason mortgage rates are lower now.

  Read more here.

• Today at 5:17 PM PST

  Grace O'Donnell

  Fed sees inflation peaking in Q1 — assuming no new major tariffs

  In his press conference, Fed Chair Powell pinned the inflation "overshoot" on tariffs, as noted below.

  However, that also means that, with the recent easing of tariffs by the Trump administration, consumers may see inflation peak early next year.

  "Let's assume there are no major new tariff announcements," Powell stated. "Inflation from goods should peak in the first quarter or so — or roughly."

  In its Summary of Economic Projections, the Fed indicated that it expects inflation to cool, with core PCE rising 2.5% by the end of 2026, down from 3% at the end of this year. Though Powell also cautioned that "no one" is able to predict inflation peaking with precision.

  Powell's comments came as the White House didn't impose any new significant tariffs last month and has started to backtrack on some existing tariffs on grocery store items to address affordability concerns.

  As my colleague Ben Werschkul reported Wednesday, the government's tariff revenues in November ticked down for the first time since President Trump began implementing his historic duties, according to new totals from the US Treasury Department.

  The agency's monthly statement for November, released on Wednesday, saw a reading of $30.76 billion in customs duties collected, following an October reading of $31.35 billion.