The December 2025 Fed Meeting Countdown: Will They Cut Again or Pause? What It Means for Your Mortgage, Savings, and Credit Cards

Four days. That’s all that separates us from the Federal Reserve’s final decision of 2025. The FOMC meets December 9-10, and markets are pricing in an 87% chance of another quarter-point rate cut — the third since September — which would lower the federal funds rate to 3.50%-3.75%. But nothing is locked in. Recent inflation upticks, tariff pressures, and a divided Fed have left the outcome hanging in the balance.

This isn’t just Wall Street drama. Whether the Fed cuts or pauses will hit your wallet directly — from the mortgage you’re trying to lock before Christmas to the interest you’re earning (or losing) on savings and the cost of carrying credit card debt.

Here’s everything you need to know right now.

Why the Decision Is So Close This Time

The U.S. economy is sending mixed signals:

• Growth remains decent: Q3 GDP came in at +2.1%, and consumer spending is still holding up.
• Jobs are cooling fast: September added only 119,000 payrolls, unemployment rose to 4.4% (highest since late 2021), and layoffs spiked in October.
• Inflation is re-accelerating: Headline CPI climbed back to 3.0% year-over-year in September, with tariffs already adding 0.6–0.7 percentage points to prices in categories like apparel and autos.

Fed officials are split. Some want to keep easing to protect the labor market; others worry that new tariffs will push inflation even higher in 2026 and want to hit pause. Chair Powell has repeatedly called the December move “data-dependent” and “not a foregone conclusion.”

What the Markets and Economists Are Betting On

As of this morning (December 5):

• 87% probability of a 25 basis-point cut (CME FedWatch Tool)
• 82% of economists surveyed by Reuters expect the cut
• Bank of America, Goldman Sachs, and JPMorgan all flipped to forecasting a December trim after dovish comments from New York Fed President John Williams

A surprise hold would jolt markets. A cut, on the other hand, is mostly priced in — meaning the bigger reaction will come from Powell’s press conference and the updated “dot plot” showing how many cuts officials expect in 2026 (current median: two).

Mortgage Rates

Mortgage rates don’t move one-for-one with the Fed, but anticipation of a cut has already pulled the 30-year fixed down to 6.19% this week. Another cut could nudge top-tier offers toward 6.0%–6.1% by mid-to-late December — potentially saving you $90–$120 a month on a $400,000 loan compared to early November peaks.

Catch: If the Fed signals fewer cuts in 2026 than expected, rates could bounce right back up in January. Anyone closing before year-end should lock a 45- or 60-day rate now while lenders are still aggressive.

Savings Accounts & CDs

High-yield savings accounts are already slipping. Top rates have fallen from around 5.00% in September to 4.50%–4.75% today. Another cut will likely shave off another quarter point by early 2026.

If you have cash sitting around, lock in a 1-year CD at 4.50%–4.60% this week — those yields won’t be here much longer.

Credit Cards & Variable-Rate Debt

Most credit cards are tied to the prime rate (fed funds + 3%). A December cut would lower the average card APR from roughly 20.3% to around 20.05% within one or two billing cycles — not life-changing, but every dollar helps when balances are high.

Real relief only comes from paying the balance off or moving it to a 0% balance-transfer card before rates start climbing again in 2026.

Your 5-Day Action Plan

1. Mortgage shoppers → Get fresh quotes today and tomorrow. Mention you’re comparing multiple lenders — many will sharpen their pencil before the meeting.
2. Refinance candidates → Run the numbers again. Even dropping from 6.75% to 6.10% can justify the closing costs if you plan to stay 5+ years.
3. Savers → Open or add to a high-yield account or short-term CD this weekend. Yields peak right before cuts, not after.
4. Credit card holders → Look for 0% or low-intro APR balance-transfer offers expiring this month. Applications are still being approved quickly.
5. Everyone → Mark your calendar for Wednesday, December 10 at 2:00 p.m. ET. The announcement drops then, followed by Powell’s press conference at 2:30 p.m. — that half-hour often moves markets more than the decision itself.

The window for cheaper borrowing is narrowing fast. Whether the Fed cuts or pauses next week, the easy money era isn’t coming back anytime soon. Act this weekend, and you’ll be in the best possible position no matter what Powell says.

Stay sharp — we’ll have instant analysis the moment the decision hits.

Rates and probabilities current as of December 5, 2025, 9:30 a.m. ET. Always consult a licensed professional for personalized advice.