"The U.S. Central Bank wrapped up a two-day meeting on December 10, 2025, marking the last Fed meeting of the year. While there had initially been speculation that the Fed would keep interest rates steady in light of persistent concerns about rising inflation due to tariffs, a statement in advance of the meeting from John Williams, president of the New York Fed, bolstered hopes of a third straight rate cut as Williams dismissed the tariff effect as a temporary blip."
"The Fed ultimately delivered on that rate cut, reducing rates by a quarter point. This latest rate drop followed a 25-basis-point cut in September and another 25-basis-point cut in October, and it resulted in the benchmark rate ending up in the 3.50% to 3.75% range as of the end of 2025, down from a 4.25% to 4.50% target rate at the start of the year."
"Ultimately, the Fed's decisions don't have a direct impact on the amount of Social Security benefits seniors will get next year. Benefits are based on average wages in the 35 years when seniors earn the most, and those numbers will remain unchanged, as will the formula used to calculate benefits. Where the Fed's decision does have an impact, though, is on how far those benefits will go and on what upcoming Cost of Living Adjustments could look like for seniors."
The U.S. Federal Reserve concluded its December 10, 2025 meeting with a 25-basis-point interest-rate cut, the third consecutive reduction after September and October. The benchmark federal funds rate moved to a 3.50%–3.75% target range from 4.25%–4.50% at the start of 2025. New York Fed President John Williams characterized tariff-driven inflation pressures as temporary. The rate cut was widely anticipated and may have limited immediate effects on mortgage rates and bond yields. Social Security benefit formulas and reported wage averages remain unchanged, but lower rates influence purchasing power and could affect future Cost-of-Living Adjustments.
Read at 24/7 Wall St.
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