Fed Cuts Rates, Commits to Short‑Term Treasury Purchases

2025-12-10

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Fed Cuts Rates, Commits to Short‑Term Treasury Purchases

Bread and Circus: The Complete Record of American Governance

Today’s newsletter covers official U.S. government happenings from the executive, legislative, and judicial branches yesterday, as well as key economic indicators. Below, you’ll find concise summaries of each document, with links to the original sources for further reading.

What Happened Yesterday:

🦅 Executive Branch: 1 documents (1 Rule)
🏛️ Legislative Branch: 1 documents (1 Congressional Bill)
⚖️ Judicial Branch: 2 documents (2 Supreme Court Oral Arguments)
📊 Economic Indicators: 3 documents (1 Bureau of Labor Statistics press release, 2 Federal Reserve press releases)
Total words condensed: 64,098 into 1,677

The Big Picture

Policymakers moved toward easier money last week: the Federal Reserve cut its policy rate by 0.25 percentage points to a 3.50–3.75% range on December 10, 2025 and said it will buy short‑term Treasury bills to keep bank funding normal. That step makes borrowing a bit cheaper for households and businesses and follows Fed staff projections that will shape markets; the Fed also warned inflation remains above its 2% goal and noted job growth has slowed. Labor costs data show wages plus benefits rose 0.8% from June to September and 3.5% over the year (real pay up roughly 0.5–0.6% year‑over‑year), so pay gains persist but are modest in real terms — a mix that helps explain the Fed’s cautious pivot.

At the same time, government and legal moves change rules in quieter but important ways. Congress sent S.616 to the President on December 10, 2025, which would move many legal details governing the Foundation of the Federal Bar Association into the group’s own bylaws (and allow it to relocate its office and bar some political spending), so the foundation and its chapters would operate under fewer statutory constraints if the President signs it. The Office of Personnel Management issued a technical correction, effective December 10, 2025, to remove typos in a hiring rule tied to the earlier end of a fellowship program — this fixes clarity but does not change deadlines or rights. And the Supreme Court heard two cases with big practical stakes: one could decide whether private investors can sue to unwind unlawful fund contracts, and the other could change how courts treat IQ tests and related evidence in death‑penalty cases — outcomes that would alter enforcement and life‑and‑death standards if the Court rules one way or another.

Pattern to Watch

A modest shift toward monetary easing is emerging: the Fed’s 25‑basis‑point cut on December 10, 2025, its decision to buy short‑term Treasuries, the December economic projections, and signs of slower job growth all point to officials responding to cooling labor markets while inflation remains above target. Key indicators backing this pattern are the new fed‑funds target of 3.50–3.75%, the Fed’s announced Treasury purchases to ease bank funding, and labor‑costs data showing 3.5% annual pay growth but only about 0.5–0.6% real wage gains. If the Fed makes further cuts, extends or expands Treasury purchases, or projects a lower path for rates in coming releases — and if monthly job reports and the Employment Cost Index continue to soften while inflation drifts down — that will signal continuation or escalation of this easing stance.

🦅 Executive Branch

Federal Register

The Office of Personnel Management fixed two small wording mistakes in a federal hiring rule (5 CFR 315.713): it added the word “and” at the end of paragraph (a)(1) and replaced “; and” with a period at the end of paragraph (a)(2). This correction is effective December 10, 2025, and applies to federal agencies, their human resources staff, and anyone who reads or uses these hiring rules — they should use the corrected text right away. It does not change any hiring rights or deadlines from the earlier August 11, 2025 rule that ended the Pathways Presidential Management Fellows program; it only removes a typo so the rule reads clearly and avoids confusion. Read full document →

🏛️ Legislative Branch

Congressional Bills

S.616 (sponsored by Sen. John Kennedy), introduced Feb. 18, 2025 and presented to the President on Dec. 10, 2025, would change the federal charter for the Foundation of the Federal Bar Association so that many rules now set in law are instead set by the foundation’s own bylaws (its internal rules); it would let the board pick the group’s office anywhere in the U.S. instead of requiring it be in Washington, D.C., set membership, board duties, and officer elections by the bylaws, bar officers and the group from using money to do political activity or try to influence laws, ban loans to officers/members/employees, allow reasonable pay and reimbursements and grants to chapters, and let the board decide what happens to leftover assets if the group closes. The bill has finished passing Congress and was sent to the President on Dec. 10, 2025 (it becomes law only if the President signs it). The main people affected are the foundation itself, its board, officers, members, employees, and local Federal Bar Association chapters; ordinary citizens are affected only indirectly (because the law changes how a lawyer-serving foundation is run, where it is based, and limits its political spending). Read full document →

⚖️ Judicial Branch

Supreme Court Oral Arguments

This case, FS Credit Opportunities Corp. v. Saba Capital Master Fund, asks whether a part of the Investment Company Act lets private people sue in court to cancel (called “rescission”) fund contracts that break the law. The funds and the United States (supporting them) say the law’s words and structure do not clearly give anyone a new private right to sue, that Congress changed the key language in 1980 and left enforcement mainly to the SEC; Saba says the text does speak of “rescission by any party,” the history shows Congress expected private suits, and earlier cases support letting investors sue. The Justices pushed both sides hard: Justice Sotomayor pointed out the 1980 House and Senate reports saying Congress wanted private suits, Justice Barrett asked whether a very clear statement is needed before courts imply a new right, and Justice Kavanaugh warned, “I think this case is extremely close” while asking what would happen in state court. The outcome matters to ordinary people because it decides whether investors can go to court themselves to undo unfair fund rules (which could protect retirement savings) or whether those fights will be left mainly to the SEC or to state courts. Read full document →
This was Hamm v. Smith, a death‑penalty case about whether courts must treat many IQ test scores in a certain way when deciding if someone is too intellectually disabled to be executed — in short, can a state require a person to prove his true IQ is more likely than not 70 or below. Alabama (the petitioner) said Joseph Smith is not disabled, that lower courts wrongly treated one low score or loose evidence as decisive, and that states may set a clear IQ rule or use methods like medians or overlaps to combine scores; the U.S. government backed that view. Smith (the respondent) answered that courts must look at all the evidence — other test results, school history, doctors’ opinions and “adaptive” skills like daily living — and that the lower courts correctly found him disabled after hearing experts. The Justices pushed hard on both sides: Chief Justice Roberts tested a tough example — “what if the scores were 69, 68, 69, 69, 75?” — Justice Sotomayor pressed the petitioner to “show me one state case” using its rule, and Justice Kagan said Hall and Moore require giving a defendant a chance to present adaptive‑functioning evidence though judges can still weigh many higher scores together. This matters to everyone because the decision will decide how courts use science and tests in life‑and‑death cases and whether people with low or mixed IQ scores can be put to death. Read full document →

📊 Economic Indicators

Federal Reserve

The Federal Reserve said it is cutting its main short‑term interest rate by 0.25 percentage point to a range of 3.50%–3.75% and will buy short‑term U.S. government bonds to keep banks’ cash supplies healthy. That cut makes borrowing a bit cheaper (so mortgages, car loans, and business loans can fall) and can help jobs because companies may hire more, but the Fed also warned that inflation is still higher than it wants (its goal is 2%) and that job growth has slowed and unemployment has risen a little. This matters to everyday people because it can change how much you pay for loans, how much you earn on savings, and how easy it is to find work. Read full document →
On December 10, 2025 the Federal Reserve released the economic projections from its December 9–10 meeting — a set of tables and charts showing what Fed officials expect for growth, unemployment, inflation, and the federal funds rate in the months ahead. The release itself did not instantly change the short‑term interest rate; instead it tells markets and businesses how Fed officials see the economy and where they think interest rates may go. Those projections matter because if officials signal higher rates, banks and mortgage lenders tend to raise loan rates and savers may get better returns; if they signal lower rates or falling inflation, borrowing gets cheaper and prices may rise more. In short, the report helps set expectations that affect mortgage, car loan, credit card rates, job prospects, and everyday prices. Read full document →

Bureau of Labor Statistics

The government’s measure of how much it costs employers to pay workers showed that total pay (wages plus benefits) rose 0.8 percent from June to September 2025 and rose 3.5 percent over the year ending in September 2025; wages alone rose 0.8 percent in the three months and 3.5 percent over the year, and benefits also rose 0.8 percent in the quarter and 3.5 percent in the year. For private companies, wages rose 3.6 percent year over year, and for state and local government workers total pay rose 3.6 percent (wages up 3.5 percent and benefits up 3.8 percent). After taking out inflation, wages were still a bit higher than a year ago (about 0.6 percent higher for private workers and 0.5 percent higher for state and local workers), which means most people’s pay slightly outpaced price increases; this matters because it affects how much money people really have to spend, how much it costs employers to hire workers, and can influence prices and hiring decisions. The report was delayed and fewer firms responded because of a federal funding gap. Read full document →

Sources Covered Today

Federal Register: Sunset of the Pathways Presidential Management Fellows Program; Correction
Congressional Bill: S 616: Foundation of the Federal Bar Association Charter Amendments Act of 2025
Supreme Court Oral Argument: FS Credit Opportunities Corp. v. Saba Capital Master Fund
Supreme Court Oral Argument: Hamm v. Smith
Federal Reserve: Federal Reserve issues FOMC statement
Federal Reserve: Federal Reserve Board and Federal Open Market Committee release economic projections from the December 9-10 FOMC meeting
BLS: Employment Cost Index

All U.S. Government Activity Yesterday:

Presidential actions issued: 0
Regulations: 1
Bills presented to president: 1
Bills that became law: 0
Supreme Court opinions issued: 0
Supreme Court oral arguments: 2

This is your daily record of history unfolding — no spin, just facts. For 342,952,418 people in the United States, this was yesterday.

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