What Happens if the Fed Cuts Rates Before Christmas Eve?

Key takeaways

• The Fed’s Dec. 9-10 meeting carries unusual weight as markets wait to see whether another rate cut will arrive before Christmas, shaping bonds, equities and crypto.

• After two cuts in 2025, rates now sit at 3.75%-4.00%. Labor weakness and softer inflation support further easing, but officials remain divided because inflation risks have not fully cleared.

• A cooling job market, easing inflation and the end of quantitative tightening could justify another reduction and align with year-end liquidity needs.

• Sticky inflation, gaps in economic…