US: Trump May Not Receive Polling Boost From Lower Gas Prices

The updated Dot Plot retains the same end-year medians vs September's projections, as widely anticipated: 3.6% for end-2025, 3.4% end-2026, and 3.1% for end 2027-2028.

• 2025 saw 6 members pencil in no cut at December's meeting, but a solid 12 put in a 25bp cut.
• The 2026 distribution shows a bit of divergence, with the number of participants at the top dot at 3.9% rising to 3 from 2. Otherwise it's a fairly solid 3.4% median, with 7 above that figure and 12 at or below it. Notably the bottom dot has fallen to 2.1% from 2.6% previously - we'd suspect this is Gov Miran.
• Otherwise for 2027 and 028, the distributions are basically identical.
• Looking at the longer-run dot, while unchanged at 3.0%, we are getting very close to an increase: there are now 5 on 3.00% and 5 below it, with vs 4 and 6 respectively in the previous edition. One of those dots moving above 3.00% would force a shift higher (some had seen it rising to 3.1% at this meeting).

• -1,500 WNH6 118-24, sell through 118-26 post time bid at 1408:00ET, DV01 $274,500.
• The 30Y Ultra contract trades 118-17 last (+6)

A comparison of December's rate decision statement vs the previous edition in October below:

• The only major change is in forward guidance, which was widely expected, noting "In considering the extent and timing of additional adjustments..." vs previously "In considering additional adjustments". This is seen as maintaining the overall easing bias while suggesting that the consecutive pace of reductions is set to slow in 2026.
• The new statement also mentions the launch of reserve management purchases as noted earlier.
• 2 dissents in favor of a hold is more or less in line with expectations, though most thought along with KC's Schmid that it would be St Louis's Musalem that dissented - instead it was Chicago's Goolsbee. (Gov Miran dissented in favor of a 50bp cut for the 3rd consecutive meeting, as expected.)