The Federal Reserve's recent meeting initially seemed to signal a rate cut (bringing interest rates down to the 3.5%-3.75% range), but take a closer look at the underlying tone—it's a classic surface-level compromise, while the stance remains firmly hawkish.

Unusual dissent appeared in the voting, economic forecasts were revised upward, and most importantly, the dot plot directly placed "only one rate cut by 2026" on the table. Is this a rate cut? No, it’s a clear message to the market: stop dreaming, the rate cut cycle is coming to a halt.

**The dot plot reveals the true stance**

Remember September? The dot plot at that time suggested multiple rate cuts by 2026. But with the December release, the tone shifted dramatically—the median expectation shifted to only one cut in 2026, with a 25 basis point decrease.

What does this mean? The "ceiling" for this cycle's rate cuts is likely set around 3.25%-3.50%, which is considerably higher than market expectations before. In other words, don't expect interest rates to go much lower.

**Outside voices from Powell**

Powell spoke quite "restrained" at the press conference, but his words were full of signals of pause:

First, will there be future rate cuts? He was very clear—let the data speak; a pause or a slight adjustment is possible. This is a far cry from the previous tone of "we'll cut if inflation stabilizes," showing much more caution.

Second, the economy is more resilient than expected. The Fed raised its 2026 GDP growth forecast from 1.8% to 2.3%, and concerns about unemployment have eased. The implicit message is: with the economy so strong, why cut rates?

Third, inflation is not over yet. Acknowledging that inflation remains sticky above target, and the adjustment in core PCE indicates that the final stretch of fighting inflation will be tough.

In summary: The Fed's meeting signaled that rates are indeed being held steady—no more rate cuts for now. If the market still expects easing policies to rescue the economy, it may be disappointed.