This is December 10, 2025, marking the Federal Reserve’s sixth rate cut since September 2024, lowering the federal funds target range to 3.50%–3.75%. Yet, what truly stands out is the strongest internal dissent at the Fed in six years: three explicit votes against the decision, along with "silent opposition" reflected in the dot plot.
01 Divergence Between Hawks and Doves
The Fed’s monetary policy decision-making circle is facing unprecedented division. At the December 10 meeting, three out of twelve Federal Open Market Committee members voted against the 25-basis-point rate cut—the first such split since September 2019.
Specifically, Fed Governor Stephen Milan advocated for a one-time 50-basis-point cut, while Chicago Fed President Austan Goolsbee and Kansas City Fed President Jeffrey Schmid argued for keeping rates unchanged.
This split isn’t just a numerical difference; it represents a fundamental disagreement within the Fed over the outlook for the US economy. Mike Fratantoni, Chief Economist at the Mortgage Bankers Association, noted that while inflation remains well above the Fed’s target, the labor market is weakening, giving both sides ammunition to support their positions.
"It’s a heated debate," commented a Wall Street analyst after reviewing the meeting’s outcome. "The Fed is caught in a dilemma: managing inflation that’s still above target while confronting a softening job market."
02 The Silent Dissenters
Beyond the three officials who openly voted against the rate cut, there are more "silent dissenters" within the Fed.
The dot plot released on December 11 reveals that as many as six Fed policymakers expect the benchmark rate to remain at 3.75%–4% by the end of 2025—the same level as before the cut. Notably, at least four of these officials did not have voting rights at this meeting, so their higher rate forecasts are seen by the market as silent opposition.
Former Philadelphia Fed President Patrick Harker was candid: "I would have been one of the silent dissenters—I think cutting rates is the wrong move."
03 More Than a Rate Cut: A $40 Billion "Mini QE"
The real surprise in this Fed meeting was the adjustment to its balance sheet operations. Alongside the rate cut, the Fed swiftly launched a short-term Treasury purchase program dubbed "mini QE."
According to the decision, starting December 12, the Fed will buy about $40 billion in short-term Treasury bills each month to maintain ample reserves. Chair Powell made it clear that the purchase volume will remain "elevated for several months," then "sharply decline," with the program expected to conclude by April 15, 2026.
This approach is notably different from the traditional quantitative easing (QE) deployed after the financial crisis. It targets short-term bonds, aiming to maintain banking system liquidity rather than suppress long-term yields.
04 Higher Bar for Rate Cuts, Uncertain Path Ahead
At the press conference, Powell stated that the federal funds rate is "now within a broad range of neutral estimates," suggesting monetary policy is nearing a moderate stance. Coupled with hawkish statements, this was widely interpreted by markets as a signal that the Fed will continue to pause its rate-cutting cycle.
According to the CME FedWatch Tool, the probability that the Fed will keep rates unchanged at the January policy meeting has risen to 77%.
The Fed’s Summary of Economic Projections shows officials expect the median federal funds rate to remain at 3.4% in 2025 and 3.1% in 2026. This implies that, relative to current levels, markets anticipate only one additional 25-basis-point cut over the next two years.
05 Leadership Changes and Policy Uncertainty
This Fed decision comes at a pivotal moment, with leadership transitions on the horizon. Powell’s term ends in May 2026, and markets widely expect Trump to announce his successor within weeks.
Trump has publicly stated that support for rate cuts will be a "litmus test" for his choice of the next Fed Chair. He has repeatedly called for the Fed to lower rates below 2% to further stimulate the economy.
The leading candidate to succeed Powell is Kevin Hassett, Chair of the White House National Economic Council. Hassett has made it clear that, if appointed as Fed Chair, he won’t bow to political pressure and will act based on his own judgment.
06 Crypto Market’s Immediate Response to Rate Changes
Against the backdrop of the Fed’s dovish pivot, the cryptocurrency market responded swiftly and positively. Data from Gate shows that major tokens broadly rallied after the announcement.
Bitcoin (BTC) rose about 2.5% in the 24 hours following the decision, briefly breaking through a key resistance level, reflecting market optimism about improved liquidity ahead.
Ethereum (ETH) followed suit, gaining roughly 2.8%. Its spot ETF prospects, combined with the rate cut, created a dual tailwind.
Solana (SOL) outperformed, surging over 4%, highlighting the amplified effect of improved liquidity expectations on high-beta cryptocurrencies.
It’s worth noting that both the rate cut and "mini QE" directly boosted market liquidity expectations, while internal Fed divisions have added uncertainty to future policy paths—potentially driving future volatility in crypto markets.
According to the latest Gate data from December 12, the positive sentiment triggered by the Fed’s decision continued, with major cryptocurrencies maintaining steady gains during Asian trading hours.
07 Outlook: How the Rate Cut Cycle Could Impact Crypto Markets
With growing internal divisions at the Fed and impending leadership changes, uncertainty around future monetary policy has increased significantly. The consensus is that Powell may pause further moves after this cut, with additional policy adjustments likely to wait until the new Chair takes office.
Fed Governor Stephen Milan’s term expires at the end of January 2026, and it’s unclear whether he’ll be reappointed, adding to the uncertainty around future monetary policy.
For crypto markets, the Fed’s decisions directly affect dollar liquidity and global risk appetite. The hawkish voices in the dot plot suggest that markets shouldn’t expect significant rate cuts next year, which could cap the upside for risk assets like cryptocurrencies.
At the same time, internal Fed divisions and uncertain leadership transitions may keep monetary policy in a holding pattern over the coming months, with crypto markets likely to enter a period of consolidation, waiting for clearer fundamental signals.
Outlook
JPMorgan analysts believe the Fed "will continue to take steps to prevent an economic slowdown from becoming a recession," but the widening policy split within the committee makes every meeting unpredictable.
Markets had expected a more hawkish rate cut, but the outcome was more dovish than anticipated. In the dot plot, six members opposed the cut, but four lacked voting rights—lower than market expectations. The large-scale Treasury purchase announced alongside the decision was interpreted by Bloomberg and others as a clear dovish signal.
Some analysts are beginning to question whether the actual rate cut next year could exceed the 25 basis points shown in the dot plot. Former New York Fed President William Dudley commented, "The Fed will enter a period of watchful waiting in the first half of next year, with a noticeably slower pace. The political drama around Fed independence is about to begin in earnest."
