Fed Rate Cut Dissenters Highlight Inflation Concerns and Unreleased Economic Data

The Federal Open Market Committee (FOMC) voted 9-3 to cut rates by 25 basis points on December 10, 2025, with three dissents—two against the cut (Goolsbee, Schmid) and one favoring a larger cut. On December 12, the two dissenters against the cut provided their rationale: Chicago Fed President Austan Goolsbee argued the Fed should have waited for delayed economic reports on inflation and employment, while Kansas City Fed President Jeffrey Schmid emphasized that core PCE inflation (2.8% YoY) and CPI (3.0% YoY) remain above the Fed’s 2% target [0][1]. The market’s initial positive reaction (S&P 500 +0.78%, NASDAQ +0.50%, Dow Jones +1.02% on Dec 10; Dow +1.29% on Dec 11) shifted to mixed results on Dec 12, with the S&P 500 (-0.24%) and NASDAQ (-0.40%) declining slightly and the Dow (+0.16%) edging up, reflecting investor uncertainty about the Fed’s policy unity [0].

The dissent reveals a significant split within the Fed over inflation trajectory, highlighting persistent concerns about inflation stickiness despite prior rate adjustments. The emphasis on delayed economic reports underscores data uncertainty, which could complicate future policy decisions. The mixed market reaction following the dissent explanation suggests investor confidence in the Fed’s inflation-fighting credibility may be wavering, as the split signals differing views on whether current inflation data justifies policy easing [0][1].

The primary risk is increased market volatility due to the Fed’s internal split and lingering uncertainty from delayed economic reports. Investors should closely monitor the release of these reports, as they could provide critical clues about future Fed policy. The dissent also presents an opportunity for market participants to reevaluate positions based on the Fed’s evolving stance on inflation and economic data dependence [0].

This analysis covers the December 2025 Fed rate cut, the dissent from two regional Fed presidents, their rationales (high inflation, delayed data), and the subsequent mixed market reaction. Core inflation metrics remain above the Fed’s 2% target, and the FOMC’s policy split could lead to heightened volatility in upcoming weeks. No prescriptive investment recommendations are provided.