Fed Minutes Signal Imminent Rate Pause, Heightening Risk of Year-End Trump-Powell Clash

WASHINGTON — Federal Reserve officials are signaling a strong preference to halt interest rate cuts early next year, a revelation that places the central bank at odds with the White House in the final hours of 2025.

Minutes from the December 9–10 meeting expose a fractured committee and a growing consensus to keep rates "unchanged for some time." For market observers tracking the likelihood of a conversation between Donald Trump and Fed Chair Jerome Powell before the December 31 deadline, the report acts as a potent accelerant.

While the Federal Open Market Committee (FOMC) delivered a 25-basis-point cut to a target range of 3.50%–3.75% earlier this month, the internal deliberations paint a distinctly hawkish picture. The minutes reveal that "some participants" argued that the current policy stance was sufficient, a view bolstered by new Chicago Fed data pegging December unemployment at a resilient 4.6%.

This hawkish pivot has swiftly recalibrated the landscape. Futures markets are now pricing in an approximate 80% probability of a rate pause in January 2026. This trajectory directly conflicts with Trump’s historical demand for aggressive monetary easing. With economic data effectively giving the Fed permission to hit the brakes, the widening policy divergence increases the incentive for the President to intervene via a phone call or meeting to clarify the trajectory before the year concludes.

The minutes also illuminate an unusually deep internal divide, suggesting the Fed is vulnerable to pressure. The December decision featured a rare three-way split: while nine members backed the quarter-point cut, Kansas City Fed President Jeff Schmid and Chicago Fed President Austan Goolsbee dissented in favor of an immediate freeze. Conversely, Governor Stephen Miran pushed for a steeper half-point reduction to shield the labor market.

As the clock runs down on 2025, the Fed has signaled its intent to stand firm. Whether that resolve prompts a final, high-stakes communication from the White House remains the defining question of the year's end.