Federal Reserve live coverage: Fed set to cut interest rates for third time this year, 2026 forecast in focus

Stocks were muted astatine the marketplace unfastened connected Tuesday aft a Federal Reserve spokesperson confirmed the FOMC gathering was underway.

The tech-heavy Nasdaq Composite (^IXIC) fell 0.3%, portion the S&P 500 (^GSPC) was level and the Dow Jones Industrial Average (^DJI) roseate 0.2%. All 3 indexes came disconnected humble losses connected Monday.

Treasury yields steadied arsenic investors awaited the merchandise of jobs information and the Federal Open Market Committee's argumentation decision.

The benchmark 10-year output (^TNX) fell 2 ground points to 4.14%. Meanwhile, the 30-year output (^TYX) declined 3 ground points to 4.78% aft hitting its highest level successful astir 3 months connected Monday.

Read much astir today's marketplace enactment here.

The statement astir the Federal Reserve’s argumentation determination connected Wednesday has firmed astir a 25 ground constituent complaint chopped — adjacent if the determination volition beryllium a adjacent one, arsenic Yahoo Finance's Jennifer Schonberger details.

Traders are pricing successful an 89% accidental that the Fed lowers involvement rates by 25 ground points astatine the decision of the FOMC gathering connected Wednesday, according to CMEGroup's FedWatch.

But looking up to the January gathering and 2026 broadly, the way is adjacent little certain.

One wide held presumption is that the Fed volition determination guardant with a "hawkish cut" connected Wednesday, successful which the cardinal slope lowers rates but hints astatine a intermission successful January, JPMorgan’s Michael Feroli wrote successful a Dec. 5 note. Traders person enactment a 23% probability that the Federal Reserve volition proceed cutting rates astatine its Jan. 27-28 meeting.

“At the property conference, we expect that Powell volition accent that with argumentation rates adjacent to neutral, the clip for hazard absorption cuts is past and that further cuts would lone travel with a worldly deterioration successful the labour market,” Feroli wrote.

"We don’t expect him to remark straight connected January," Feroli added, "but alternatively to item that determination is simply a batch of information to beryllium released betwixt present and the January gathering and that volition usher their decision."

For the remainder of the year, views scope from the Fed cutting rates astatine its adjacent fewer argumentation meetings owed to a deterioration successful the labour marketplace to further complaint cuts successful the summertime owed to a alteration successful Fed leadership.

Read much astir 2026 predictions for Federal Reserve argumentation here.

The Federal Reserve's eventful 2025 wraps up this week, and different 0.25% complaint chopped is expected.

But the existent play successful the cardinal bank's merchandise volition beryllium successful however overmuch agreement, oregon not, determination is with this decision.

As Yahoo Finance's Jennifer Schonberger noted successful her preview of the event, astatine slightest 3 determination Fed presidents person signaled that the lawsuit for cutting rates this week does not look obvious. One of those includes Kansas City Fed president Jeff Schmid, who voted against October's complaint cut.

Add successful that Fed Governor Stephen Miran has doubly dissented successful favour of a larger complaint cut, the cardinal slope could beryllium looking astatine upward of 4 votes against the expected determination to little rates by different 0.25% connected Wednesday.

Read Jennifer's afloat preview of the gathering here.