Bloomberg Surveillance Instant Reaction: The Fed Decides
Dec 10, 2025
Bob Michael, market strategist at JPMorgan, shares insights on Fed decisions and their impact on corporate America. Diane Swank, chief economist at KPMG, discusses the implications of AI on productivity and labor markets. Matt Lozetti from Deutsche Bank examines Fed communications and the connection to market expectations. The trio tackles controversial topics like the Fed's independence, inflation risks, and the balance between economic growth and affordability as they dissect the nuances of the Fed's latest policy moves.
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Episode notes
Fed Cuts And Reserve Purchases
- The Fed cut the policy rate by 25 basis points with a 9-3 split and signaled limited further easing. They also announced T-bill and short-term Treasury purchases to maintain ample reserves.
Growth Up, Inflation Target Pushed Out
- The SEP raises GDP forecasts and delays reaching the Fed's 2% PCE goal until 2028. Members expect headline and core PCE to fall only gradually through 2026.
Chicago Dissent Highlights Productivity Debate
- Austin Goolsbee's dissent is notable and signals an unusual split on productivity and policy views. His dissent raised questions about AI-driven productivity affecting the Fed's decision.