Stock Market Investors May Get Bad News From the Federal Reserve This Week

1 week ago 7

Trevor Jennewine, The Motley Fool

Tue, December 9, 2025 astatine 6:25 AM CST 5 min read

The Federal Open Market Committee volition marque a determination concerning involvement rates connected Dec. 10; policymakers volition besides update their summary of economical projections.
The Federal Reserve is abnormally divided connected monetary policy, with Governor Stephen Miran (recently nominated by President Trump) consistently voting against the majority.
President Trump's tariffs person pushed the system toward stagflation; the banal marketplace could autumn sharply if the Federal Reserve seems progressively disquieted astir that outcome.
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The Federal Reserve volition decorativeness its two-day gathering connected Dec. 10. The marketplace expects different involvement complaint cut. Futures traders presently enactment the probability of a 25-basis-point (0.25%) chopped astatine 87%. But investors volition besides look for signs of division, and the S&P 500 (SNPINDEX: ^GSPC) could autumn if determination are concerns astir the Fed's independency being compromised.

Additionally, policymakers volition update their summary of economical projections. With the system already nether unit from President Donald Trump's tariffs, investors volition wage attraction to forecasts for GDP growth, inflation, and unemployment. Any motion that stagflation has go a much apt result would besides beryllium atrocious quality for the banal market.

Here's what investors should know.

Chairman Jerome Powell answers reporters' questions astatine an FOMC property conference.

The Federal Open Market Committee (FOMC) has 12 voting members: the 7 members of the Federal Reserve Board of Governors, the president of the Federal Reserve Bank of New York, and 4 presidents from the remaining 11 Federal Reserve banks.

The FOMC meets 8 times per twelvemonth to reappraisal economical and fiscal conditions, and to set monetary argumentation based connected its dual mandate: to support unchangeable prices and maximum employment. The FOMC's superior monetary argumentation instrumentality is adjusting the people scope connected the national funds rate, a benchmark that influences different rates passim the economy.

The FOMC is abnormally divided astir the astir due way forward. Policymakers held rates dependable successful July, but 2 governors dissented successful favour of a 25-basis-point cut. That past happened successful 1993. Subsequently, erstwhile policymakers lowered rates by 25 ground points successful October, 2 voting members dissented successful other directions.

Specifically, Governor Stephen Miran argued for a much assertive 50-basis-point complaint cut, portion Kansas City Fed President Jeffrey Schmid argued nary chopped was necessary. Two FOMC members person dissented successful other directions lone erstwhile earlier successful the past 35 years.