Big Take The Fed Just Cut Rates Again. Here’s What’s Ahead for 2026
Dec 10, 2025
In a fascinating discussion, Anna Wong, Chief U.S. economist for Bloomberg Economics, delves into the implications of the recent Federal Reserve rate cut. She explores the swift economic impacts on industrial production and housing markets. Wong also shares insights on Kevin Hassett, the potential new Fed chair, and discusses the balance between independence and accountability. With changing dynamics in Washington, she highlights risks of confusion during leadership transitions and the forecast for rates dipping below 2%. It's an eye-opening analysis of what lies ahead!
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Powell Pushed Through A Divisive Cut
- The Fed cut rates 25 basis points amid a divided FOMC, driven largely by Jerome Powell's view the labor market needs support.
- Most regional presidents preferred holding rates steady, revealing internal disagreement on policy direction.
Cuts Bite Quickly Into Housing And Industry
- Rate cuts transmit quickly into industrial production and housing within months, easing financial conditions and boosting GDP support.
- Current easing already supplies roughly 0.9% GDP support over the next 12 months absent further Fed signals.
Small, Repeated Cuts Could Continue
- Incremental 25bp moves so far reflect a stop-and-wait approach where incoming data repeatedly pushed the Fed to do more.
- Neutral rates estimates imply room for several more 25bp cuts depending on views of neutrality.
