December Fed Meeting: Live Updates and Commentary

The three main U.S. equity indexes continued to head lower Monday afternoon amid rising volatility (as measured by the market’s “fear index”) and a lot of known unknowns.

“The uncertainty of the nature of the Fed cut expected this Wednesday has put the market in a wait-and-see mode,” Louis Navellier of Navellier & Associates observes.

That 87.4% (and falling, if ever so slightly) probability is “clouded by the expectations that the cut will be highly contentious internally and whether the rhetoric will be hawkish enough to bring serious doubts about any further cuts until Chairman Powell is replaced in May.”

Navellier notes as well that absence “of complete economic data due to the catch-up from the extended government shutdown also makes reaching conclusions difficult.”

He says too that a developing “trend in interest rates is becoming more challenging,” highlighting the move in the 2-year U.S. and the 10-year U.S. government yields to their highest levels in more than a month and since March, respectively.

“The VIX had dropped to 15.3 premarket, the lowest in three months,” Navellier adds, “and has jumped back to 16.8 in an apparent caution over the upcoming Fed cut.”

While the trend remains cautiously positive, he concludes, uncertainty will continue until after Wednesday’s FOMC decision and commentary from the outgoing Fed chair.

– David Dittman

In its most romantic guise it’s the foundation of a whole new financial system where things like the next Fed meeting simply don’t matter. In more prosaic terms what cryptocurrency is and how bitcoin works boil down to digital money.

At the same time, young people recognize what’s happening here: crypto is growing and maturing. More evidence comes from an October 2025 YouGov survey surfaced by Marketwatch.com today.

According to YouGov (pdf), 26% of young men own cryptocurrency, and 28% own any crypto-based asset such as individual tokens and/or coins, crypto-based ETFs, or both. Meanwhile, 21% say they have a 401(k), Roth IRA or similar retirement fund. And 24% say they hold individual stocks.

This is consistent with similar findings from YouGov reported by Fortune in February: “Gen Z investors are four times more likely to own crypto than retirement accounts.”

To be clear, these are the crypto trends we’re watching in 2026.

– David Dittman

The Supreme Court is hearing oral arguments today in a case many observers consider a preview of the upcoming matter of whether President Donald Trump can fire Fed Governor Lisa Cook.

The White House is asking the high court to overturn a precedent established in a 1935 case, Humphrey’s Executor v. United States, that limits presidential authority to remove the heads of independent agencies.

As Reuters reports, during today’s questioning Associate Justice Brett Kavanaugh asked Solicitor General D. John Sauer, arguing on behalf of President Trump, about implications for the U.S. central bank.

“How would you distinguish the Federal Reserve from agencies such as the Federal Trade Commission?” Justice Kavanaugh asked. The Supreme Court will hear arguments on Trump’s attempt to fire Cook on January 21.

In May, the Court issued an opinion suggesting at least six justices would rule against the president. It did not explicitly overrule Humphrey’s Executor, but it did allow him to fire two members of other federal agencies’ boards.

And the Court offered a two-sentence summary on the question it will begin to answer next month.

“Finally,” the six-member majority wrote in an unsigned opinion, “respondents Gwynne Wilcox and Cathy Harris contend that arguments in this case necessarily implicate the constitutionality of for-cause removal protections for members of the Federal Reserve’s Board of Governors or other members of the Federal Open Market Committee.

“We disagree. The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States.”

– David Dittman

There’s a split among the “bullish” sectors – communication services, financial stocks, industrials and technology stocks – in the first half of Monday’s trading session. The first two are in the red, the other two are in the green.

And all three main U.S. equity indexes have stabilized with modest losses of 0.2% to 0.3%.

Action in the bond market is similarly stable, with the yield on the 2-year U.S. Treasury note up to 3.602% from 3.564% on Friday. The 10-year U.S. Treasury yield is up to 4.178% from 4.139%, the 30-year from 4.822% from 4.792%.

FedWatch shows the probability of a 25-basis-point rate cut has dipped from 89.9% to 87.6%.

What’s moving markets while we’re watching the Fed? Probably Netflix (NFLX), which faces a hostile challenge from Paramount Skydance (PSKY) as it tries to complete its next eyeball-catching expansion with the acquisition of Warner Bros. Discover (WBD).

NFLX, a leader among communication services stocks, is down more than 4% as of midday Monday. The stock recently split 10 for 1.

Tech stocks were up but off their highs after International Business Machines (IBM) announced an $11 billion deal to acquire data-infrastructure firm Confluent (CFLT), as markets continue to ask whether we’re in an AI bubble.

– David Dittman

As Bloomberg’s Joe Weisenthal notes, nobody cares about the independence of the U.S. central bank amid lingering questions about what’s next for the Fed as an institution during President Donald Trump’s second run in the White House.

The White House has already openly discussed whether it would fire Fed Chair Jerome Powell as it lobbied for lower interest rates through most of 2025. And there’s a pending Supreme Court case that will resolve Gov. Lisa Cook’s future on the Fed’s board.

“There’s a ton of talk on Wall Street and in the media that Fed independence is at risk of going away,” Weisenthal observes. “That is definitely a valid concern.”

He cites Trump’s public criticism of the FOMC and the fact that the president named the chair of his own Council of Economic Advisors to fill a recent vacancy on the board.

And Trump will soon name a successor to Powell: “One likely candidate is Kevin Hassett, and there is a fear that Hassett will be there to do Trump’s bidding, rather than assiduously pursue the Fed’s dual mandate.”

At the same time: “There’s not much evidence that this is a real concern in the market right now.” Weisenthal quotes Standard Chartered macro strategist Steve Englander at length but the bottom line is right here:

“Questions have been raised about Kevin Hassett’s credibility with markets and within the FOMC,” Englander writes, “but the questions are not showing up so far in inflation breakevens, which are close to post-2024 election lows.”

As Englander explains, “If Hassett as Federal Reserve Board Chair is expected to compromise inflation outcomes, this is where we would expect to see these concerns most clearly.”

– David Dittman

The three main U.S. equity indexes turned negative less than an hour into Monday’s trading session as investors continue to process incoming data from the economic calendar.

The S&P 500 was down about 0.2% a little more than 50 minutes after the opening bell but remained within 0.5% of its October 28 record closing high of 6,890.89. The Dow Jones Industrial Average was off 0.3%, and the Nasdaq Composite was down 0.1%.

We should probably expect a little intraday up-and-down this week, which will still amount to not much compared to movement in expectations around what the Fed will do this week.

FedWatch has been all over the place amid unprecedented data-blindness due to a record-long government shutdown. Today, it shows a near 90% probability of a 25-basis-point rate cut.

As recently as November 19 markets were about 70% certain the FOMC would hold the target range for the federal funds rate at 3.75% to 4.00% after cutting at its September and October meetings.

“To my knowledge, it’s totally unprecedented,” Peterson Institute of International Economics Senior Fellow David Wilcox told Quartz.

Wilcox said the present situation is “off the charts” and compared the Fed to a person driving with a foggy windshield.

– David Dittman

Equity index futures pointed to a higher open for Fed Week Monday morning, following through on solid gains for the first week of December. The S&P 500 closed higher for a fourth straight session and its ninth out of 10 on Friday.

“The stock market may have bounced back strongly from its November pullback,” E*TRADE Managing Director Chris Larkin observes, “but a new up leg to its rally is still a work in progress.”

According to Larkin, what the FOMC does and Federal Reserve Chair Jerome Powell say on Wednesday “will likely determine whether the S&P 500’s October record highs turn out to be genuine resistance level or just the latest notch on the bull market’s belt.”

FedWatch shows a near-90% probability the FOMC will cut the target range for the federal funds rate by another 25 basis points, following similar moves in September and October. As Larkin notes, recent incoming economic data highlight both “ongoing labor-market softness and sticky inflation.

So lower interest rates at this meeting “might not be a slam dunk” despite market optimism. “As is often the case, though,” Larkin concludes, “Chair Powell’s press conference could play a big role in shaping the market’s short-term response.”

– David Dittman

One way is to seek out high-quality growth stocks, which tend to see outsize benefits from lower interest rates.

This happens for two reasons, says Kiplinger contributor Charles Lewis Sizemore, CFA. For one, lower rates make capital cheaper and “young, fast-growing companies often rely on external funding.”

Additionally, lower interest rates boost the current value of future profits, which increases valuations for firms with long-term earnings potential.

Read more: How to Invest for Fall Rate Cuts by the Fed

In 2026, the presidents from Cleveland, Philadelphia, Dallas and Minneapolis will rotate in as FOMC voting members, according to the Federal Reserve. Additionally, Jerome Powell’s term as Fed chair is up in May.

– Karee Venema

“The committee meets eight times a year, or about once every six weeks,” writes Kiplinger contributor Dan Burrows in his feature, “When Is the Next Fed Meeting?“.

The Federal Open Market Committee “is required to meet at least four times a year and may convene additional meetings if necessary,” Burrows adds, noting that “the convention of meeting eight times per year dates back to the market stresses of 1981.”

Fed meetings last two days and wrap up with the release of a policy decision at 2 pm Eastern Standard Time. This is typically followed by the Fed chair’s press conference at 2:30 pm.

Here is the full Fed meeting schedule for 2026:

• January 27 to 28
• March 17 to 18
• April 28 to 29
• June 16 to 17
• July 28 to 29
• September 15 to 16
• October 27 to 28
• December 8 to 9

– Karee Venema