Review: The Federal Reserve Cut Rates, With a Divided FOMC

by Brunello Rosa and Nato Balavadze

In this paper, we discuss:

• The Fed’s 25bp rate cut, delivered by a deeply divided FOMC with both hawkish and dovish dissents;
• Powell’s “close call” stance as the Fed shifts into wait-and-see mode;
• The unexpected resumption of Treasury bill purchases;
• SEP projections showing inflation above target until 2028 and only one cut expected in 2026;
• Market reaction following the Fed’s third cut of the year.

Download PDF: Fed Review December 2025