U.S. COMMERCE DEPT: UPDATED Q3 GDP ESTIMATE TO BE RELEASED ON JAN 22.
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US RATES STRATEGY HEAD RAJAPPA: BIAS TILTING TOWARD LOWER YIELDS INTO YEAR-END.
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U.S. (DEC) FED INTEREST RATE DECISION ACTUAL: 3.75% VS 4.00% PREVIOUS: EST 3.75%
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FED DELIVERS SURPRISE CUT: U.S. POLICY RATE SLASHED TO 3.75%, MARKETS BRACE FOR PIVOT ERA

#FedDecision #RateCut #FederalReserve #FOMC #USRates #MonetaryPolicy #MarketShock #Dollar #Bonds #Equities
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FED: SIGNALS RATE-CUT PAUSE BY ADDING “EXTENT AND TIMING” TO DESCRIBE ITS APPROACH TO FUTURE POLICY ADJUSTMENTS.
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FED: ECONOMY GROWING AT A MODERATE PACE; JOB GAINS SLOWING, UNEMPLOYMENT EDGING UP. INFLATION HAS RISEN FROM EARLIER THIS YEAR AND REMAINS ELEVATED.
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FED: OUTLOOK UNCERTAINTY REMAINS HIGH; SAYS DOWNSIDE EMPLOYMENT RISKS HAVE INCREASED AND IS WATCHING BOTH SIDES OF ITS DUAL MANDATE.
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FED: TO START RESERVE-MANAGEMENT PURCHASES OF TREASURY BILLS ON DEC 12; FIRST OPERATION TO BUY ABOUT $40B IN T-BILLS.
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FED: TREASURY BILL BUYING TO STAY ELEVATED FOR A FEW MONTHS; FUTURE PURCHASES LIKELY TO BE SIGNIFICANTLY REDUCED.
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FED: LIFTS OPERATIONAL LIMIT ON STANDING O/N REPO OPERATIONS; POLICY VOTE 9–3 — MIRAN SOUGHT A 50 BPS CUT, GOOLSBEE & SCHMID WANTED NO CUT.
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FED OFFICIALS’ MEDIAN FED FUNDS RATE VIEW: 3.6% FOR END-2025 (UNCHANGED); 3.4% FOR END-2026 (UNCHANGED).
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FED OFFICIALS’ MEDIAN FED FUNDS RATE VIEW: 3.1% FOR END-2027 (UNCHANGED) AND 3.1% FOR END-2028 (UNCHANGED).
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FED OFFICIALS’ LONG-RUN MEDIAN RATE VIEW HOLDS AT 3.0%; PROJECTIONS SIGNAL 25 BPS CUT IN 2026 AND 25 BPS CUT IN 2027.
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FED: PROJECTIONS SHOW WIDE SPLIT ON RATE PATH FOR 2026+; POLICYMAKERS SEE 4.4% UNEMPLOYMENT AT END-2026, UNCHANGED FROM SEPTEMBER.
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FED: END-2026 PCE INFLATION NOW SEEN AT 2.4% (VS 2.6% PRIOR); CORE AT 2.5% (VS 2.6%). EXPECT 2026 GDP GROWTH 2.3% (UP FROM 1.8%); LONG-RUN GROWTH UNCHANGED AT 1.8%.
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SPOT GOLD PARES LOSSES AFTER FED DECISION, NOW DOWN 0.1% AT $4,203.99/OZ.
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FED ENDS OPERATIONAL LIMIT ON STANDING OVERNIGHT REPO OPERATIONS.
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FED: INITIAL T-BILL BUYING TO STAY ELEVATED FOR A FEW MONTHS; FUTURE RESERVE-MANAGEMENT PURCHASES WILL BE SIGNIFICANTLY REDUCED.
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FED: WATCHING BOTH SIDES OF ITS MANDATE; SAYS DOWNSIDE EMPLOYMENT RISKS HAVE INCREASED.
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FED: ECONOMY GROWING AT A MODERATE PACE; JOB GAINS SLOWING AND UNEMPLOYMENT EDGING UP.
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S&P 500 UP 0.38% AFTER FED RATE CUT.
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