Fed Discount Rate Minutes: In December, FOMC approved 25bps cut in rate on discounts and advances made under primary credit programme

Discount Rate

• The directors of four  Federal Reserve Banks had voted to establish a decrease in the primary credit rate. The directors of the Federal Reserve Bank of New York had voted on November 26,  2025, and the directors of the Federal Reserve Banks of Philadelphia, St. Louis, and  San Francisco had voted on December 4, to establish the primary credit rate at  3.75 percent (a decrease from 4 percent). 
• The directors of the Federal Reserve Banks of Boston, Cleveland, Richmond, Atlanta, Chicago, Minneapolis, Kansas City, and Dallas had voted on December 4, 2025, to establish the primary credit rate at the existing level of 4 percent.

Economic Commentary

• Overall, Federal Reserve Bank directors noted stable economic activity, though conditions varied across sectors and Districts. 
• Several directors commented on improved labor availability and modest wage pressures—outside of certain skilled positions that remain hard to fill—but also cited increased costs for health insurance. 
• Several directors also noted the ongoing impact of technology and artificial intelligence (AI) on the labor market, including their effects on employment levels. 
• While some directors described a mixed climate for business investment, most noted strong demand for investments related to AI and data center financing and construction. 
• Most directors anticipated tariff-related and other cost increases in 2026. Several directors noted economic pressures on low-income households