Bankinter | The Fed cuts benchmark interest rates (Fed Funds) by a quarter of a point to 3.5%/3.75% as expected. The decision was not unanimous, with one vote in favour of cutting by 50bp (Miran) and two in favour of maintaining rates (Goolsbee and Schmid). They announced that from 12 December they will increase their balance sheet again by purchasing treasury bills, not as part of their monetary policy, but as a measure to maintain sufficient liquidity in the financial system.
Bankinter analysis team’s view: Positive for stock markets and bonds, especially due to Powell’s comments on growth for 2026 (revised from 1.8% to 2.3%) and inflation, which he sees at around 2% without the impact of tariffs, an impact that he expects to diminish from Q2 2026 onwards.
