Treasury yields remained largely unchanged on the first trading day of 2026 as investors assess the US economic outlook and potential for further rate cuts, with the 10-year yield at 4.155% and upcoming Federal Reserve decisions in focus.
The Federal Reserve released the minutes of its December 9-10, 2025, Federal Open Market Committee meeting, providing insights into the economic and financial conditions considered during the policy decision, with the minutes available on the Federal Reserve's website.
The Federal Reserve's December meeting minutes reveal a closely contested decision to cut interest rates by 0.25%, with significant dissent among officials who debated the timing and extent of future rate adjustments amid mixed economic signals and concerns over inflation and labor market conditions.
Kevin Hassett, a top contender for Fed chair, emphasized the Fed's independence and stated that President Trump’s opinions would have no weight in setting interest rates, despite Trump’s desire for influence. Hassett expressed willingness to discuss with Trump regularly but clarified that the final decision rests with the FOMC, which votes collectively. The nomination process remains open, with other candidates like Kevin Warsh also in consideration.
The Federal Reserve's FOMC announced a 1/4 percentage point cut in the federal funds rate to 3-3/4 to 4 percent, citing moderate economic growth, slowed job gains, and elevated inflation, while emphasizing ongoing monitoring and readiness to adjust policies as needed to support maximum employment and 2% inflation.
The Federal Reserve released the minutes of its September 16–17, 2025, Federal Open Market Committee meeting, providing insights into the economic and financial conditions considered during the policy decision, available on the Fed's website.
Federal Reserve Bank of Dallas President Lorie Logan advocates for modernizing the FOMC's operating target rate from the fed funds rate to a repo rate, citing changes in financial markets, the fragility of the current system, and the need for a more robust and transparent target to improve monetary policy effectiveness.
The dot plot is a quarterly scatter chart used by the Federal Reserve to project future interest rates, reflecting the views of FOMC members on the appropriate federal funds rate over the coming years. While it provides insight into policymakers' expectations and can influence market perceptions, it is not an official consensus forecast and lacks transparency about individual contributions, leading to mixed opinions among Fed leaders and critics.
The Federal Reserve's FOMC announced a 1/4 percentage point cut in the federal funds rate to 4-4.25%, citing moderated economic growth, slowing job gains, and elevated inflation, while emphasizing ongoing support for maximum employment and inflation at 2%, with future policy adjustments contingent on incoming data.
President Trump is pushing for a significant interest rate cut from the Federal Reserve, but recent developments, including the confirmation of Federal Governor Lisa Cook and the Fed's cautious stance, suggest that only a modest 25 basis point cut is likely. Trump's efforts to influence Fed appointments and policy have faced setbacks, and market expectations remain subdued, with analysts predicting a cautious approach from the Fed amid mixed economic signals.
A federal appeals court ruled that President Trump cannot fire Federal Reserve Governor Lisa Cook before the upcoming FOMC meeting, allowing her to participate in the decision on interest rates. Trump had attempted to fire Cook over alleged mortgage fraud, but her lawsuit and the court's decision have prevented her removal for now.
Investors expect the Federal Reserve to cut interest rates this week, with JPMorgan predicting a 95% chance of a dovish 25 basis-point cut, which could initially boost the stock market by around 1%, but may lead to a sell-off later due to macroeconomic concerns and market positioning.
The Federal Open Market Committee (FOMC) has unanimously approved updates to its long-term goals and monetary policy strategy, emphasizing its commitment to promoting maximum employment and stable prices, with recent revisions aimed at improving transparency, accountability, and effectiveness based on lessons from the past five years.
Futures for major stock indexes are down amid a tech sector pullback driven by the decline of the 'Magnificent Seven' stocks and concerns over AI rally sustainability, with market focus also on Fed Chair Powell's upcoming speech and retail earnings reports from Walmart and others.
The Federal Reserve released the minutes of the July 29–30, 2025, Federal Open Market Committee meeting, providing insights into the economic and financial conditions considered during the policy decision, available on the Federal Reserve's website.