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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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.
Data Blackout Shifted The Fed's Signal Sources
- The government shutdown erased key data releases, leaving the Fed to lean on the Beige Book and private payroll proxies.
- Those alternate indicators signaled weakening labor momentum and influenced Powell's decision to cut.
Public Dissents Signal Waning Chair Influence
- Open dissents on the FOMC suggest a loss of the chair's soft power and signal a potential end of an era under Powell.
- Public dissents indicate disagreement has become visible rather than confined to closed-door debate.
