December 10, 2025

Good Wednesday evening. In this edition: Divided Fed cuts interest rates by quarter point; and House approves defense policy bill.

• Plus, oil tanker, union rights, health care and Miami mayor.

Interest Rates

The Federal Reserve cut interest rates by a quarter point, lowering borrowing costs for the third consecutive time this year amid signs of a weakening labor market.

• The move sets the target range for the federal funds rate at 3.5% to 3.75%, its lowest level since late 2022.

Federal Reserve Chair Jerome Powell said the central bank was facing a "very challenging situation" as it seeks to balance its dual mandate of maximum employment and stable prices.

• He described the decision as a "close call," but said most Federal Open Market Committee (FOMC) participants favored a step that would boost the labor market rather than prioritizing the fight against persistent inflation.

The September jobs report, released only weeks ago following delays caused by the government shutdown, showed strong monthly job gains but unemployment rising to a four-year high of 4.4%.

• Meanwhile, the Fed's preferred inflation gauge, the core personal consumption expenditures (PCE) price index indicated a 0.2% monthly rise in September while the annual rate was 2.8%, above the Fed's 2% target.

Chair Powell said a "reasonable base case" is that the inflationary effects of tariffs will be "relatively short-lived."

• "Our obligation is to make sure that a one-time increase in the price level does not become an ongoing inflation problem," he told reporters.
  
  
• "But with downside risks to employment having risen in recent months, the balance of risks has shifted. Our framework calls for us to take a balanced approach in promoting both sides of our dual mandate."

For the fourth straight meeting, there was disagreement among FOMC members, with three dissenting on the 25-basis-point cut.

• Governor Stephen Miran, currently on leave from the White House while serving at the Fed until January, voted instead for a half-point cut.
  
  
• Kansas City Fed President Jeffrey Schmid and Chicago Fed President Austan Goolsbee preferred to keep rates unchanged.

FOMC participants signaled they expect just one rate cut in 2026 and another in 2027 before the federal funds rate settles near a longer-run level of about 3%.

• "We haven't made any decision about January, but as I said, we think we're well positioned to wait and see how the economy performs," Chair Powell told reporters.

Watch the Fed press conference.

NDAA

The House approved the 2026 National Defense Authorization Act, the annual defense policy and programs bill that's considered must-pass legislation.

• The final vote was 312–112, with 18 Republicans and 94 Democrats voting against it.

The 3,086-page compromise bill authorizes more than $900 billion for the Pentagon, nuclear weapons development, and other national security programs — an $8 billion increase over President Trump's request.

• The measure includes a 3.8% pay raise for service members.

It also includes a provision requiring the Pentagon to release video of the Sept. 2 U.S. military strikes on a suspected drug boat in the Caribbean.

• The provision would withhold a quarter of Defense Secretary Pete Hegseth's travel budget unless the Pentagon turns over the unedited footage to the Armed Services committees.

The NDAA aims to codify more than a dozen of President Trump's executive orders related to defense and national security.

• It would authorize the use of active-duty troops along the U.S.–Mexico border, greenlight deployment of a "Golden Dome" project to defend the homeland from aerial attacks, and prohibit diversity, equity and inclusion (DEI) programs at the Pentagon.

It repeals the authorizations for use of military force (AUMFs) used to attack Iraq in 1991 and 2003, removes sanctions on Syria, and limits the Trump administration's ability to significantly draw down U.S. troops in Europe.

• The bill also includes $400 million in military assistance to Ukraine for the next two fiscal years and supports efforts to recover Ukrainian children who have been abducted by Russia.

The NDAA now heads to the Senate, which is expected to approve it next week, sending it to President Trump's desk.

Watch the House debate and vote.

In other news…

• President Trump said the U.S. has seized an oil tanker off the coast of Venezuela, as his administration increases pressure on the country's leader, Nicolas Maduro. "As you probably know, we've just seized a tanker on the coast of Venezuela — a large tanker, very large, the largest one ever seized, actually," he told reporters. The president did not offer any further details about the operation but said it was seized for "a very good reason." He added that the U.S. would probably "keep" the oil from the tanker.
  
  

• The House voted 222–200 to force action on Rep. Jared Golden's (D-ME) bill to repeal President Trump's executive order that stripped union rights for federal employees involved in national security work. Thirteen Republicans joined all Democrats to advance the bill after Rep. Golden's discharge petition secured the 218 signatures needed. A vote on the rule for the bill, and possibly on the bill itself, is expected on Thursday.
  
  

• Speaker Mike Johnson (R-LA) said House Republicans will bring their own health care legislation to the floor next week, as the Senate prepares to vote Thursday on two competing proposals, neither of which is expected to secure the 60 votes needed to advance. "We have some low-hanging fruit that every Republican agrees to," he told reporters. "You're going to see a package come together that will be on the floor next week that will actually reduce premiums for 100% of Americans who are on health insurance."
  
  

• Rep. Brian Fitzpatrick (R-PA) filed a discharge petition seeking to bring a bill to the House floor that would extend the enhanced Obamacare subsidies for two years along with a handful of reforms. The petition, which needs 218 signatures to force a vote on the floor, already has 10 Republican cosponsors. House Minority Leader Hakeem Jeffries (D-NY) has his own petition on a bill that would give a clean three-year extension of the subsidies. All Democrats but no Republicans have signed it.
  
  

• Democrat Eileen Higgins was elected as the next mayor of Miami, defeating Republican Emilio Gonzalez and continuing Democrats' elections hot streak. She will become the first Democratic mayor of Miami since 1997, succeeding incumbent Mayor Francis Suarez (R). "Tonight's result is yet another warning sign to Republicans that voters are fed up with their out-of-touch agenda that is raising costs for working families across the country," DNC Chair Ken Martin said in a statement.

For your radar…

• Homeland Security Secretary Kristi Noem testifies Thursday before the House Homeland Security Committee. Watch LIVE on C-SPAN3 at 10am ET.
  
  

• The Senate votes Thursday on the competing Democratic and Republican health care bills. Watch LIVE on C-SPAN2 starting at 10am ET.

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