US Fed faces dual-mandate challenge amid a divided path forward
No clear policy prescription exists as policymakers balance sticky inflation against labour market risks
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THE Federal Reserve’s Dec 10 meeting revealed a central bank at a critical inflection point – one marked by unprecedented internal division, competing economic pressures and mounting uncertainty about the path ahead.
While the Federal Open Market Committee delivered its third consecutive quarter-point rate cut, bringing the federal funds rate to 3.5 to 3.75 per cent, the 9-3 vote and the cautious tone from chair Jerome Powell suggest the era of steady rate reductions may be ending. As we look to 2026 and beyond, several key developments are likely to shape monetary policy in the months ahead.
The most immediate implication of the December meeting is that a sustained pause in rate cuts now seems highly probable.
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