The Federal Reserve on Wednesday, Dec. 10, trimmed the main interest rate by a quarter point to a range between 3.5% and 3.75% as concerns about weakness in the job market overrode worries that inflation persists above the central bank’s 2% target.
Fed officials in a median projection forecast just one quarter-point reduction in the federal funds rate in 2026. They expect that their preferred measure of inflation — the personal consumption expenditures price index less volatile food and energy prices — will end 2026 at 2.5%, 0.1 percentage point lower than their September estimate.
They raised their forecast for economic growth next year to 2.3% from 1.8% in September. Central bank officials also estimate that the unemployment rate will end at 4.4% in 2026, no change from their September forecast. See more takeaways.