Odds Now At 90% (LIKELY) The U.S. Prime Rate Will Be Cut to 6.75% At Tomorrow's (December 10, 2025) FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 90% (likely) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to lower the benchmark target range for the fed funds rate (TRFFR) by 25 basis points (BPS) to 3.50% - 3.75% at tomorrow's (December 10, 2025) monetary policy meeting, which would lower the U.S. Prime Rate to 6.75%.

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Hard + Soft Data

  

Despite a persistent inflation problem, serious weakness in jobs, manufacturing and the American consumer translates to a likely 25 BPS cut for the TRFFR tomorrow. 

Check out where the University of Michigan's Current Conditions Index stands right now (3-month moving average), compared to where it was during the worst days of the COVID-19 pandemic...☟😐☟

• Stay tuned...

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The United States Prime Rate was lowered to the current 7.00% on October 29, 2025.

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SUMMARY

• Current odds the U.S. Prime Rate will be cut to 6.75% at tomorrow's (December 10^TH, 2025) FOMC monetary policy meeting: 90% (likely.)

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Odds Now At 75% (SOMEWHAT LIKELY) The U.S. Prime Rate Will Be Cut to 6.75% At the December 10, 2025 FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 75% (somewhat likely) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to lower the benchmark target range for the fed funds rate (TRFFR) by 25 basis points (BPS) to 3.50% - 3.75% at the December 10^TH, 2025 monetary policy meeting, which would lower the U.S. Prime Rate to 6.75%.

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On Inflation and Tariffs

  

Here are some clips from a November 3^RD, 2025 speech by Fed Governor Dr. Lisa D. Cook, at The Brookings Institution in Washington, D.C.:
 

"...My outreach to business leaders suggests that the pass-through of tariffs to consumer prices is not yet complete. Many firms have adopted a strategy of running down their inventories at lower price levels before raising prices. Others have reported waiting until tariff uncertainty is resolved before passing increases on to consumers. New car models, clothing lines, and other products will be coming onto the market, and that process will continue to provide firms with an opportunity to level set prices. As such, I expect inflation to remain elevated for the next year.

Nonetheless, the effect of tariffs on prices, in theory, should represent a one-time increase. It is encouraging that most long-run inflation expectations, including from the New York Fed Survey of Consumer Expectations, are low and stable at this juncture. When excluding tariff effects, 12-month core PCE inflation through September appears to be about 1/2 percentage point lower at about 2.3%, suggesting that underlying inflation has continued to make progress toward target. My assessment is that inflation is on track to continue on its trend toward our target of 2% once the tariff effects are behind us. The big caveat is that tariff effects must prove not to be persistent and that monetary policy remains appropriately focused on achieving that goal.

This is a point worth dwelling on for just a moment. The FOMC's firm commitment to its inflation mandate is imperative to ensure that inflation does remain in check, as I do expect in my baseline forecast. So let me be clear. I am committed to reaching our 2% inflation target. Moreover, I will be prepared to act forcefully, if the tariff effects appear to be larger or last longer than expected, or if other evidence emerges that higher levels of inflation are becoming entrenched in expectations.

In summary, after a temporary slowdown due to the government shutdown, I expect the economy to grow moderately over the medium term, supported by an AI productivity boom. I see the labor market as still solid, but I am highly attentive to downside risks. I see inflation as remaining somewhat elevated due to tariff effects and subject to upside risks..."

"...Labor Market

I will now turn to the labor market. We have less recent official data on the labor market, but the latest available indicators suggest that the labor market remains solid, though gradually cooling. The unemployment rate edged up over this summer from 4.1% in June to 4.3% in August, a relatively low reading one would expect to see in a healthy economy. To put 4.3% into perspective, the average unemployment rate over the 50-year period preceding the pandemic was 6.2%.

Since August, more recent labor-market indicators, such as UI claims, job postings, and individuals' assessments of job availability, signal little change to the August reading -- at most a small uptick. Taken together, the slightly rising  unemployment rate indicates the labor market is softening, but only modestly so..."

• Stay tuned...

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The United States Prime Rate was lowered to the current 7.00% on October 29, 2025.

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SUMMARY

• Current odds the U.S. Prime Rate will be cut to 6.75% at the December 10^TH, 2025 FOMC monetary policy meeting: 75% (somewhat likely.)

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Seventh FOMC Monetary Policy Meeting of 2025 Adjourned: United States Prime Rate Is Lowered to 7.00%

United States Prime Rate

The Federal Open Market Committee (FOMC) of the Federal Reserve System has just adjourned its seventh monetary policy meeting of 2025 and, in accordance with our latest forecast, has voted to lower the benchmark target range for the federal funds rate to 3.75% - 4.00%. Therefore, the United States Prime Rate (a.k.a the Fed Prime Rate) is now 7.00%.

NB: U.S. Prime Rate = (The Fed Funds Target Rate + 3)

Here's a clip from today's FOMC press release (note text in bold):

"...Available indicators suggest that economic activity has been expanding at a moderate pace.  Job gains have slowed this year, and the unemployment rate has edged up but remained low through August; more recent indicators are consistent with these developments. Inflation has moved up since earlier in the year and remains somewhat elevated.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment rose in recent months.

In support of its goals and in light of the shift in the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent. In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee decided to conclude the reduction of its aggregate securities holdings on December 1. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Susan M. Collins; Lisa D. Cook; Austan D. Goolsbee; Philip N. Jefferson; Alberto G. Musalem; and Christopher J. Waller. Voting against this action were  Stephen I. Miran, who preferred to lower the target range for the federal funds rate by 1/2 percentage point at this meeting, and Jeffrey R. Schmid, who preferred no change to the target range for the federal funds rate at this meeting..."

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Odds Now At 90% (VERY LIKELY) The U.S. Prime Rate Will Be Cut to 7.00% At the October 29, 2025 FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 90% (very likely) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to lower the benchmark target range for the fed funds rate (TRFFR) by 25 basis points (BPS) to 3.75% - 4.00% at the October 29^TH, 2025 monetary policy meeting, which would lower the U.S. Prime Rate to 7.00%.

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On Jobs and Immigration Policy

  

 From the September 17, 2025 post-FOMC-meeting press conference:
 

"...CHAIR POWELL. Well, I was -- I was saying that what's happening in the labor market has more to do with immigration than it has to do with tariffs. That was the question I was answering.

So I wouldn't say that all of what's happening in the labor market is due to tariffs. I mean, you clearly have a slowing due to immigration. You clearly have a slowing in demand, which is now perhaps more than that in supply. And we know that because the unemployment rate has ticked up. So that's how -- that's what I meant by that..."

 And here's the latest from the White House, on the H-1B Visa program:

"...On Friday, September 19, 2025, President Donald J. Trump signed a Proclamation, 'Restriction on Entry of Certain Nonimmigrant Workers,' that took an important, initial, and incremental step to reform the H-1B visa program to curb abuses and protect American workers.

This Proclamation:

    Requires a $100,000 payment to accompany any new H-1B visa petitions submitted after 12:01 a.m. eastern daylight time on September 21, 2025. This includes the 2026 lottery, and any other H-1B petitions submitted after 12:01 a.m. eastern daylight time on September 21, 2025..."

In energy news, a potential inflation-stoker: for the week which ended on September 12, 2025, crude oil inventories decline by -9,3000,000 barrels, while the year-on-year change was -2,200,000 barrels.😐

Drivers out there may already see higher prices at the pumps...🛢😒⛽ 😑

       Stay tuned...

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The United States Prime Rate was lowered to the current 7.25% on September 17, 2025.

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SUMMARY

• Current odds the U.S. Prime Rate will be cut to 7.00% at the October 29^TH, 2025 FOMC monetary policy meeting: 90% (very likely.)

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Federal Open Market Committee (FOMC) Monetary Policy Meeting Schedule for 2025 & 2026

👇: Here's the Federal Open Market Committee (FOMC) monetary policy meeting schedule for 2025 and 2026.

Why is this schedule important to you? Because it's at these monetary policy meetings that the FOMC votes on whether to raise, lower or make no changes to the target range for Fed Funds Target Rate, and when the Fed Funds Target Rate changes, the United States Prime Rate (also known as the Fed Prime Rate) will also change (how the United States Prime Rate works):

======👇2025👇======

• January 29, 2025
  
  
• March 19, 2025
  
  
• May 7, 2025
  
  
• June 18, 2025
  
  
• July 30, 2025
  
  
• September 17, 2025
  
  
• October 29, 2025
  
  
• December 10, 2025

======👇2026👇======

• January 28, 2026
  
  
• March 18, 2026
  
  
• April 29, 2026
  
  
• June 17, 2026
  
  
• July 29, 2026
  
  
• September 16, 2026
  
  
• October 28, 2026
  
  
• December 9, 2026

• January 27, 2027

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Federal Open Market Committee (FOMC) Monetary Policy Meeting Schedule for 2027

👇: Here's the Federal Open Market Committee (FOMC) monetary policy meeting schedule for 2027.

Why is this schedule important to you?

Because it's at these monetary policy meetings that the FOMC votes on whether to raise, lower or make no changes to the target range for Fed Funds Target Rate, and when the Fed Funds Target Rate changes, the United States Prime Rate (also known as the Fed Prime Rate) will also change (click here to see how the United States Prime Rate works):

======👇2027👇======

• January 27, 2027
  
  
• March 17, 2027
  
  
• April 28, 2027
  
  
• June 9, 2027
  
  
• July 28, 2027
  
  
• September 15, 2027
  
  
• October 27, 2027
  
  
• December 8, 2027

• January 26, 2028

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Sixth FOMC Monetary Policy Meeting of 2025 Adjourned: United States Prime Rate Is Lowered to 7.25%

United States Prime Rate

The Federal Open Market Committee (FOMC) of the Federal Reserve System has just adjourned its sixth monetary policy meeting of 2025 and, in accordance with our latest forecast, has voted to lower the benchmark target range for the federal funds rate to 4.00% - 4.25%. Therefore, the United States Prime Rate (a.k.a the Fed Prime Rate) is now 7.25%.

NB: U.S. Prime Rate = (The Fed Funds Target Rate + 3)

Here's a clip from today's FOMC press release (note text in bold):

"...Recent indicators suggest that growth of economic activity moderated in the first half of the year. Job gains have slowed, and the unemployment rate has edged up but remains low. Inflation has moved up and remains somewhat elevated.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment have risen.

In support of its goals and in light of the shift in the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 4 to 4‑1/4 percent. In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy, as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Susan M. Collins; Lisa D. Cook; Austan D. Goolsbee; Philip N. Jefferson; Alberto G. Musalem; Jeffrey R. Schmid; and Christopher J. Waller. Voting against this action was Stephen I. Miran, who preferred to lower the target range for the federal funds rate by 1/2 percentage point at this meeting..."

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• Summary of Economic Projections

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Odds Now At 100% (CERTAIN) The U.S. Prime Rate Will Be Cut to 7.25% At the September 17, 2025 FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 100% (certain) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to lower the benchmark target range for the fed funds rate (TRFFR) by 25 basis points (BPS) to 4.00% - 4.25% at the September 17^TH, 2025 monetary policy meeting, which would lower the U.S. Prime Rate to 7.25%.

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The Latest Jobs Data have
 Sealed the Rate-Cut Deal

 

• An estimated and tepid 22,000 nonfarm jobs were created during August, 2025, while the June, 2025 figure was revised to -13,000, the first negative reading since the beginning of the COVID-19 pandemic.
  
  
• Both month-on-month and year-on-year, job openings were negative according to the July, 2025 JOLTS report.
  
  
• Challenger, Gray & Christmas reported "...85,979 job cuts in August, up 39% from the 62,075 announced in July..."
  
  

  "...Employers announced plans to add 1,494 jobs in August, the lowest total for the month since Challenger began tracking hiring plans in 2009..."

• Year-on-year, the Core PCE Price Index, the Fed's preferred inflation measure, moved higher, from +2.8% for July, 2024, to +2.9% during July, 2025.
  
  
  • So the Fed will be cutting short-term rates while inflation remains untamed. Such drama!😌 
• One more reading on inflation before the September 17^TH, FOMC meeting: the Consumer Price Index, which will be released on September 11, 2025, 8:30 A.M., ET.
  
  
• Here's a communication from the White House, on tariffs. 

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Stay tuned...

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The United States Prime Rate was lowered to the current 7.50% on December 18, 2024.

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SUMMARY

• Current odds the U.S. Prime Rate will be cut to  7.25% at the September 17^TH, 2025 FOMC monetary policy meeting: 100% (certain.)

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Odds Now At 80% (Likely) The U.S. Prime Rate Will Be Cut to 7.25% At the September 17, 2025 FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 80% (likely) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to lower the benchmark target range for the fed funds rate (TRFFR) by 25 basis points (BPS) to 4.00% - 4.25% at the September 17^TH, 2025 monetary policy meeting, which would lower the U.S. Prime Rate to 7.25%.

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The Latest

 

• Markets tanked on Friday, in response to reciprocal tariffs. 😐
  
  
• According the Labor Department, an estimated 73,000 nonfarm jobs were created last month. This anemic number, along with the recent trend, has dramatically boosted odds that the Fed will cut short-term rates on September 17, 2025.
  
  

  

  Nonfarm Payrolls - JOBS - July 2023 THRU July 2025

  
  
• Year-on-year, the Core PCE Price Index, the Fed's preferred inflation gauge, moved sideways: +2.8% for both June, 2024 and June, 2025.
  

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Stay tuned...

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The United States Prime Rate was lowered to the current 7.50% on December 18, 2024.

=======

SUMMARY

• Current odds the U.S. Prime Rate will be cut to  7.25% at the September 17^TH, 2025 FOMC monetary policy meeting: 80% (likely.)

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Fifth FOMC Monetary Policy Meeting of 2025 Adjourned: United States Prime Rate Holds At 7.50%

United States Prime Rate

The Federal Open Market Committee (FOMC) of the Federal Reserve System has just adjourned its fifth monetary policy meeting of 2025 and, in accordance with our latest forecast, has voted to leave the benchmark target range for the federal funds rate at 4.50% - 4.75% to 4.25% - 4.50%. Therefore, the United States Prime Rate (a.k.a the Fed Prime Rate) holds at 7.50%.

NB: U.S. Prime Rate = (The Fed Funds Target Rate + 3)

Here's a clip from today's FOMC press release (note text in bold):

"...Although swings in net exports continue to affect the data, recent indicators suggest that growth of economic activity moderated in the first half of the year. The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate.

In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Susan M. Collins; Lisa D. Cook; Austan D. Goolsbee; Philip N. Jefferson; Alberto G. Musalem; and Jeffrey R. Schmid. Voting against this action were Michelle W. Bowman and Christopher J. Waller, who preferred to lower the target range for the federal funds rate by 1/4 percentage point at this meeting. Absent and not voting was Adriana D. Kugler..."

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 The United States Prime Rate was lowered to the current 7.50% on December 18, 2024.

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