Odds Now At 80% (LIKELY) The U.S. Prime Rate Will Remain at 6.75% After the January 28, 2026 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 leave the benchmark target range for the fed funds rate (TRFFR) at the current 3.50% - 3.75% at the January 28^TH, 2026 monetary policy meeting, which would leave the United States Prime Rate at 6.75%.

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Jobs + Retail + Inflation

• According the Labor Department, an estimated 64,000 nonfarm jobs were created during November, 2025. The October 2025 reading was revised to -130,000. 😐
  
  
  The unemployment rate rose to 4.6%. 
  
  
  
• Year-on-year (Y-o-Y), the Core PCE Price Index was 3.0% during September, 2025.
  
  
  Y-o-Y, the September, 2024 reading was 3.1%.
  
  
  
• Y-o-Y, the Retail Sales reading for October, 2025 was a decent +3.47%.
  
  
  The month-on-month reading, however, was a very anemic +0.026%.

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Stay tuned...

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The United States Prime Rate was lowered to the current 6.75% on December 10, 2025.

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SUMMARY

• Current odds the U.S. Prime Rate will remain at 6.75% after the January 28^TH, 2026 FOMC monetary policy meeting: 80% (likely.)

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Eighth and Final FOMC Monetary Policy Meeting of 2025 Adjourned: United States Prime Rate Is Lowered to 6.75%

United States Prime Rate

The Federal Open Market Committee (FOMC) of the Federal Reserve System has just adjourned its eighth and final 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 3.50% - 3.75%. Therefore, the United States Prime Rate (a.k.a the Fed Prime Rate) is now 6.75%.

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 through September. 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 3-1/2 to 3‑3/4 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 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.

The Committee judges that reserve balances have declined to ample levels and will initiate purchases of shorter-term Treasury securities as needed to maintain an ample supply of reserves on an ongoing basis.

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; 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 Austan D. Goolsbee 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% (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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