Federal Reserve's Year-End Showdown: "Hawkish Rate Cut" Virtually a Done Deal

**December 10: Fed to Release Year’s Final Rate Decision at 3 a.m. Beijing Time** The U.S. Federal Reserve will announce its final interest rate decision of the year tonight at 3 a.m. Beijing time, facing a tough call amid a data "air pocket" and internal divisions. A widely expected rate cut is likely to be paired with vague guidance on next year’s rate path—leaning toward a hawkish tone. Beyond this week’s expected cut, investors now project two more 25-basis-point reductions by end-2026, leaving the benchmark rate in the 3.00%-3.25% range. JPMorgan’s Chief U.S. Economist Michael Feroli noted that hawkish signals from regional Fed presidents could keep the 2026 rate outlook aligned with September’s projections—even as expectations for this week’s cut are already muted and the bar for further cuts is high. Feroli added that the Fed’s new rate forecasts will "reflect unease about rate cuts," while the policy statement may tweak wording to "imply a lower likelihood of rate cuts at subsequent meetings." Powell is expected to stress in his post-meeting press conference that further cuts will only materialize "if the labor market deteriorates significantly."