Federal Reserve News Today: Rate Cut Odds Near 90% as Trump Eyes New Fed Chair

On December 4, 2025, Federal Reserve watchers are juggling three big storylines at once:

Markets are almost certain the Fed will cut interest rates again next week.
Donald Trump is moving to reshape the central bank’s leadership, with Kevin Hassett now the clear favorite to replace Jerome Powell.
The Fed has quietly ended quantitative tightening and stopped losing money, even as political pressure over its independence intensifies.

Here’s a detailed, Google‑News–friendly rundown of all the major Federal Reserve news today, what it means, and what to watch next.

December 2025 Fed Meeting: Markets See a Near‑Certain Rate Cut

The Federal Open Market Committee (FOMC) holds its final meeting of 2025 on December 9–10, with a policy decision and press conference scheduled for December 10. ^[1]

After weeks of mixed economic data and a historic government shutdown that delayed key statistics, traders now see a December rate cut as overwhelmingly likely:

CME FedWatch futures and similar tools put the odds of a 25‑basis‑point cut at roughly 80–90%, up from about two‑thirds just a month ago. ^[2]
A widely cited Reuters analysis notes that Bank of America Global Research now expects a quarter‑point cut in December, plus two more cuts in mid‑2026, putting the eventual policy rate around 3.00%–3.25%. ^[3]

The current federal funds target range is 3.75% to 4.00%, following a 0.25‑point cut announced on October 29, when the Fed cited rising risks to employment while inflation remained above its 2% target. ^[4]

In short: markets believe the Fed is already deep into a rate‑cutting cycle and is very likely to ease again next week.

Weaker Jobs Data Is Driving Today’s Rate‑Cut Hopes

A big part of the story today is the labor market, which is finally showing clearer signs of cooling:

The ADP National Employment Report showed private payrolls fell by 32,000 in November, versus expectations for roughly a 40,000 gain — the sharpest decline since early 2023. ^[5]
The ISM services index for November held nearly steady around 52.6, suggesting modest expansion, but its “prices paid” component remains elevated, confirming that inflation pressures haven’t entirely vanished. ^[6]

For investors, this mix is familiar:

Bad news for jobs, good news for stocks.

As one market newsletter pointed out, stocks rallied after the weak ADP report because every hint of labor‑market deterioration increases the odds of a Fed rate cut in December. CME data show probabilities for a 25‑bp cut around December 10 have climbed to roughly 89%, up from about 66% a month ago. ^[7]

That shift is also reflected in Wall Street:

A Reuters market wrap last night reported that the Dow Jones rose about 0.9%, the S&P 500 about 0.3% and the Nasdaq around 0.2%, as traders processed the ADP and ISM data through the lens of easier Fed policy ahead. ^[8]

Put simply, softening jobs + delayed official data + cautious Fed rhetoric = markets betting hard on a December cut.

Trump, Bessent and the New Battle Over Fed Independence

While markets obsess over next week’s interest‑rate move, politics around the Fed are heating up fast.

In remarks at the New York Times DealBook Summit, Treasury Secretary Scott Bessent said he would push for a new rule requiring regional Federal Reserve bank presidents to have lived in their districts for at least three years before taking office. ^[9]

Under current law:

Regional Fed presidents are chosen by local boards but must be approved by the Board of Governors in Washington, which can already block appointments. ^[10]
Bessent suggested the Board could “veto” future presidents who don’t meet his proposed residency requirement.

He argued that too many current regional presidents have deep New York or Wall Street ties, undermining the original idea that they represent their own districts. ^[11]

What worries many economists is what this implies for central‑bank independence:

Bessent has been publicly critical of several regional presidents who opposed an immediate December rate cut, even after the October and September easings. ^[12]
The White House has also pushed aggressively against Governor Lisa Cook, whom Trump is trying to remove, and is preparing to choose a new Fed chair when Powell’s term ends in May 2026. ^[13]

Together, these moves are seen as part of a broader effort to align the Fed more closely with the administration’s preference for rapid rate cuts, raising fresh questions about how insulated monetary policy really is from politics.

Kevin Hassett Emerges as the Frontrunner to Replace Powell

Those independence concerns are front‑and‑center today because one name now dominates the Fed succession chatter: Kevin Hassett.

An in‑depth explainer from Al Jazeera lays out why markets and prediction platforms see Hassett as Trump’s likely pick to lead the Federal Reserve: ^[14]

Hassett currently serves as director of the National Economic Council, and previously chaired Trump’s Council of Economic Advisers. ^[15]
Prediction market Kalshi puts the probability of Hassett being nominated at about 86%, far above other contenders like former Governor Kevin Warsh or current Governor Michelle Bowman. ^[16]
He has openly argued that, if he were in Powell’s shoes, he would already be cutting rates, aligning closely with Trump’s calls for a much lower policy rate — sometimes as low as 1%. ^[17]

Economists quoted in the same piece warn that a Hassett appointment would likely:

Tilt the Fed more dovishly on rates, pushing for faster easing.
Intensify concerns about political influence over monetary policy, especially given Trump’s public attacks on Powell and efforts to oust Lisa Cook. ^[18]

At the same time, they note that the Fed chair still has only one vote on the 12‑member policy committee, which includes several Biden‑appointed governors. Any chair, Hassett included, would still have to navigate a deeply divided FOMC. ^[19]

The Fed Ends Quantitative Tightening — and Finally Stops Losing Money

Beyond rates and personalities, two structural shifts inside the Fed are making headlines today: the end of quantitative tightening (QT) and the end of a three‑year run of operating losses.

QT officially ended on December 1

In its October 29 policy statement, the FOMC announced it would conclude the reduction of its securities holdings on December 1, effectively ending QT. ^[20]

Subsequent reporting and analysis show:

QT2, launched in 2022, reduced the Fed’s balance sheet from around $9 trillion at its peak to about $6.5–6.6 trillion by late 2025. ^[21]
Minutes from the October meeting revealed broad support among policymakers for stopping QT early, partly due to rising stress in money markets and concern about reserve shortages. ^[22]
Commentaries from banks and asset managers note that ending QT marks a pivot from “balance sheet runoff” to liquidity management, including the option of limited Treasury bill purchases to keep reserves plentiful. ^[23]

A widely shared MarketWatch column framed the move bluntly: the Fed stopped QT not because “everything is fine” but because “the money pipes are clogged,” drawing parallels to the 2019 repo‑market scare. ^[24]

The Fed’s losses are shrinking for the first time in years

At the same time, fresh data show that the Fed is no longer bleeding cash:

According to a Reuters report, the Fed’s “deferred asset” — the accounting item that tracks accumulated losses — has started to shrink, edging down from about $243.8 billion to $243.2 billion between early and late November. ^[25]
That shift suggests the Fed is again earning enough income to cover the interest it pays on bank reserves and reverse repos, thanks in part to the recent rate cuts that reduced those payouts. ^[26]

Economists quoted in the report estimate that the 12 regional Reserve Banks could generate over $2 billion in combined profits this quarter, although it may take years before the Fed fully works off its deferred asset and resumes sending surplus profits to the Treasury. ^[27]

Fed officials stress that these accounting swings do not impair the central bank’s ability to conduct policy, but critics in Congress have seized on the losses to argue that the current framework unduly subsidizes the banking system. ^[28]

Global Markets: World Shares Mixed as Fed Cut Rally Pauses

On the market front, global stocks are reacting in real time to Fed expectations:

An Associated Press roundup reports that world shares were mixed on Thursday after U.S. indexes pushed near record highs, with Japan’s Nikkei up more than 2% and approaching an all‑time high, largely on bets that the Fed will cut again next week. ^[29]
European markets are mostly positive but cautious, as traders weigh lofty tech valuations against the prospect of cheaper money. ^[30]
Another widely syndicated piece describes Asian and European markets as “mixed” as traders struggle to hold the Fed‑cut rally, noting that expectations for a third straight rate cut have risen to around 90% after a series of dovish remarks from Fed officials. ^[31]

Within the U.S., yesterday’s trading session underscored the theme:

Stocks climbed despite weak employment data, with the Dow, S&P 500 and Nasdaq all closing higher as investors focused on the “good news” that weak jobs might bring faster easing. ^[32]

In other words, markets are already trading as if the Fed has all but decided to cut in December, even though officials insist the outcome remains data‑dependent.

How Today’s Fed News Is Rippling Through Mortgage Rates

For households, the most tangible effect of Fed policy is showing up in mortgage rates, which are now flirting with the 6% mark:

Yahoo Finance reports the average 30‑year fixed mortgage rate at about 6.00% today, based on Zillow data, down roughly 0.11 percentage points from a day earlier. ^[33]
Forbes’ daily mortgage tracker puts the 30‑year fixed at around 6.19%, also slightly lower than last week. ^[34]
Freddie Mac’s Primary Mortgage Market Survey showed the 30‑year fixed averaging 6.23% as of November 26, down from 6.81% a year earlier. ^[35]

Analysts generally tie this decline to expectations of further Fed cuts, combined with easing long‑term Treasury yields. MarketWatch and Redfin both project that rates could hover in the low‑6% range into 2026, assuming the Fed does not have to slam on the brakes again for inflation. ^[36]

What this means in practical terms:

Homebuyers: Slightly lower mortgage rates modestly improve affordability, though prices and limited inventory still keep monthly payments high.
Homeowners with older loans: Many mortgages written at 3% or less are still “too good to give up,” but if the Fed continues cutting into 2026, refinance math could start to work for borrowers currently locked in around 7–8%.
Savers: High‑yield savings and money‑market accounts that surged alongside earlier rate hikes may see yields plateau or slip if the Fed cuts again.

Inside the Fed: Recent Speeches and Regulatory Moves

Beyond headline monetary policy, the Fed has released a steady stream of speeches, minutes, and regulatory actions in the run‑up to next week’s meeting:

On December 1, Chair Jerome Powell delivered opening remarks at an event honoring George Shultz, focusing mostly on historical lessons rather than fresh policy guidance, but reiterating the importance of stable inflation and strong labor markets. ^[37]
On December 2, Vice Chair for Supervision Michelle Bowman testified before Congress on supervision and regulation, detailing the Fed’s approach to bank oversight amid shifting interest‑rate and liquidity conditions. ^[38]
The Fed also recently released minutes from its late‑October meeting, showing broad support for further easing and for ending QT on December 1, but also highlighting dissent from officials worried about persistent inflation and the long‑term size of the balance sheet. ^[39]

These communications, combined with the formal blackout period now in effect ahead of the December decision, mean markets will be relying heavily on incoming data — especially Friday’s delayed PCE inflation report — to fine‑tune their expectations. ^[40]

What Today’s Federal Reserve News Means for You

Putting all of this together, December 4, 2025 is a pivotal day in the Fed story:

Rate cuts are not guaranteed, but markets are treating them as highly likely.
- If the Fed does cut next week, expect short‑term borrowing rates, like those on credit cards and some adjustable‑rate loans, to drift lower over time — though lenders don’t always pass cuts through immediately.
The Fed’s balance sheet and profit picture are shifting.
- Ending QT and halting operating losses reduces one source of political attack, but increases scrutiny of how the Fed manages liquidity and its vast portfolio of Treasurys and mortgage‑backed securities.
Political pressure is intensifying.
- Trump’s likely nomination of Kevin Hassett, combined with Bessent’s push to reshape how regional Fed presidents are chosen, raises the stakes for Fed independence in 2026 and beyond.
Markets are priced for a “soft landing,” not a deep recession.
- Stocks near record highs, narrowing credit spreads and easing mortgage rates all reflect a belief that the Fed can cool inflation without crashing the economy. If incoming data or politics upset that narrative, volatility could jump quickly.

For now, the simplest way to think about today’s Federal Reserve news is this:

The Fed hasn’t cut rates yet — but markets, politicians and even its own balance sheet are already acting like a new phase of easier money has begun.