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Source: Federal Reserve; Compiled by: Bitcoin Vision
FOMC Statement
Existing indicators show economic activity is expanding at a moderate pace.Job growth has slowed this year and the unemployment rate rose slightly in September.Recent indicators also confirm this trend.Inflation has increased since the beginning of the year and remains at a high level.
The FOMC’s goals are full employment and 2% inflation over the long term.Uncertainty about the economic outlook remains high.The FOMC closely monitors risks to its dual mandate and believes that downside risks to employment have increased in recent months.
In support of its objectives and in light of changes in the balance of risks,The FOMC decided to lower the federal funds rate target range by 0.25 percentage points to 3.5% to 3.75%..In considering the magnitude and timing of further adjustments to the target range for the federal funds rate, the Committee will carefully evaluate the latest data, the changing economic outlook, and the balance of risks.The Committee remains firmly committed to supporting full employment and restoring inflation to its 2 percent target.
The FOMC will continue to closely monitor the impact of new information on the economic outlook as it evaluates the appropriate stance of monetary policy.If risks arise that may hinder the achievement of the FOMC’s goals, the FOMC will stand ready to adjust the stance of monetary policy as appropriate.The FOMC’s assessment will consider a wide range of information, including labor market conditions, inflation pressures and inflation expectations, as well as financial and international conditions.
The FOMC believes that reserve balances have dropped to an adequate level and will begin purchasing short-term Treasury securities as needed to continue to maintain an adequate supply of reserves.
Voting in favor of monetary policy action were:
Chairman, Jerome H. Powell; Vice Chairman, John C. Williams; Michael S. Barr; Michelle W. Bowman; Susan M. Collins; Lisa D. Cook; Philip N. Jefferson; Alberto G. Mussallem; and Christopher J. Waller.
Voting against the action were:
Stephen I. Milan, who favors lowering the target range for the federal funds rate by 0.5 percentage point at this meeting;
and Austen D. Goolsby and Jeffrey R. Schmid, who prefer to keep the target range for the federal funds rate unchanged at this meeting.
On the implementation of monetary policy
In order to implement the monetary policy statement issued by the Federal Open Market Committee on December 10, 2025, the Federal Reserve has made the following decisions:
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The Board of Governors of the Federal Reserve System voted unanimously to lower the interest rate on reserve balances to 3.65%, effective December 11, 2025.
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As part of its policy decision, the Federal Open Market Committee voted to direct the New York Federal Reserve Bank’s open market trading desk, until otherwise directed, to execute trades in the system’s open market accounts in accordance with the following domestic policy directive: “Effective December 11, 2025, the Federal Open Market Committee directs the trading desk to:
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Conduct open market operations as necessary to maintain the federal funds rate within the target range of 3.5% to 3.75%.
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At an interest rate of 3.75%Standing overnight repurchase agreement operations.
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At an issuance rate of 3.5%Standing overnight reverse repurchase agreement operations, with a daily single transaction limit of $160 billion.
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Maintain adequate reserve levels by increasing securities holdings in the system’s open market accounts through purchases of Treasury securities and, as necessary, other Treasury securities with remaining maturities of three years or less.
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Repay all Treasury securities held by the Fed through auction.Reinvest all agency securities held by the Federal Reserve into short-term Treasury securities.
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In related action, the Federal Reserve Board of Governors voted unanimously to lower the benchmark credit rate by 0.25 percentage points to 3.75%, effective December 11, 2025.In taking this action, the Board of Governors approved a request to set the rate submitted by the boards of the Federal Reserve Banks of New York, Philadelphia, St. Louis, and San Francisco.
About Reserve Management Purchases (RMP)
On December 10, 2025, the Federal Open Market Committee (FOMC) directed the Open Market Trading Desk of the Federal Reserve Bank of New York (the “Desk”) to increase its System Open Market Account (SOMA) securities holdings to maintain adequate reserve levels by purchasing Treasury securities in the secondary market (or, if necessary, Treasury securities with remaining maturities of three years or less).The size of these Reserve Management Purchases (RMPs) will be adjusted based on expected trend increases in demand for the Fed’s liabilities as well as seasonal fluctuations, such as those affected by tax dates.
Monthly Reserve Management Purchase Program (RMP) amounts will be announced around the ninth business day of each month, along with tentative purchase plans for approximately the next thirty days.
The trading desk is planned forThe first plan will be released on December 11, 2025, when a total of approximately US$40 billion in government bonds will be purchased; purchases will begin on December 12, 2025.The trading desk expects the pace of the reserve purchase program to remain elevated in the coming months to offset an expected large increase in non-reserve liabilities in April.Thereafter, total purchases are likely to slow significantly based on expected seasonal changes in the Fed’s liabilities.The purchase amount will be appropriately adjusted based on reserve supply prospects and market conditions.
The department was also instructed in October toReinvests agency securities held by the Federal Reserve into Treasury securities through secondary market purchases.The monthly purchase plan will include Reserve Management Purchases (RMPs) as well as these purchases.
The trading desk plans to allocate monthly secondary market purchases between the two Treasury sectors.The purchase amount for each sector will be determined based on the sector weight.These sector weights will be based on the 12-month average of the face value of outstanding Treasury debt in each sector as a percentage of the total outstanding Treasury debt in both sectors as of the end of September 2025.
About standing overnight repurchase operations
According to the implementation note issued by the FOMC on December 10, 2025, the Open Market Trading Desk of the Federal Reserve Bank of New York (the Trading Desk) will make the following adjustments to its standing overnight repurchase agreement (repo) operations starting on December 11, 2025.
Going forward, the standing overnight repurchase operation will no longer have a maximum transaction amount and will adopt a full allotment model, through the FedTrade Plus trading platform.Eligible counterparties can submit one transaction request per security type during twice-daily trading sessions, up to a limit of $40 billion per transaction.Trade requests will be allocated immediately upon closing of the trade at the overnight repurchase operation rate.All other operating parameters remain unchanged.
