> ## Content Index > Fetch the complete content index at: https://the-long-horizon.ghost.io/llms.txt > Use this file to discover other available public pages before exploring further. # The rate stacked on top of every other rate hasn't moved since December. - URL: https://the-long-horizon.ghost.io/the-rate-stacked-on-top-of-every-other-rate-hasn-t-moved-since-december/ - Published: 2026-01-07T12:00:00.000Z - Updated: 2026-01-07T12:00:00.000Z - Description: Cash, business credit, and bond funds are all measured against this same brick. - Author: Jonathan Morgan - Tags: Long Horizon, #Import 2026-08-06 23:54 ## THE HORIZON On December 10, 2025, the Federal Reserve cut its benchmark rate by 25 basis points, moving the federal funds target range to 3.5 percent to 3.75 percent. That is a brick. It sits in the same wall as every rate decision before it, the one that determines what a builder's cash, his debt, and his next dollar of new capital cost him. The decision has been in place for four weeks now, still the operative rate as a new year opens, since the Fed's next scheduled meeting does not land until late January 2026\. Every dollar of cash sitting in a money market fund or a savings account today is earning yield built on this brick specifically. ## THE EVENT The Federal Open Market Committee voted to lower the federal funds rate by a quarter point at its December 9-10, 2025 meeting, according to the Federal Reserve's own statement. The move continued a series of cuts through 2025 aimed at supporting a labor market that had shown signs of softening. Chair Jerome Powell's press conference following the decision, held December 10, emphasized that future cuts would depend on incoming data rather than a preset path. The committee's updated projections, released the same day, showed a divided outlook among members for how much further easing 2026 might bring. Markets had largely priced in the quarter-point cut ahead of the meeting, and the immediate reaction across stocks and bonds was muted. The bigger market response came from the tone of Powell's remarks about the pace of cuts still ahead, rather than from the cut itself. ## THE PATH For a builder holding cash in a high-yield savings account or money market fund, this brick lowers the interest rate on that cash almost immediately, typically within days of the Fed's move. A $50,000 emergency fund earning 4.5 percent instead of 4.75 percent produces about $125 less in annual interest, a small but real cost of holding safety. The same brick lowers borrowing costs for anyone financing a business expansion with a variable-rate line of credit tied to the prime rate. A $200,000 business line of credit repricing 25 basis points lower saves roughly $500 a year in interest, capital that can instead fund inventory, equipment, or hiring. Fixed mortgage rates respond less directly to Fed moves than to the 10-year Treasury yield, but the general direction of Fed policy still shapes lender expectations. A builder planning a home purchase or refinance in early 2026 is operating in an environment where the Fed has now signaled three consecutive cuts across 2025. The less obvious brick sits in how this rate interacts with bond fund duration inside a 401(k) or IRA. As short-term rates fall, previously issued bonds paying higher fixed coupons become relatively more valuable, which is part of why bond fund prices often rise when the Fed cuts, even though new cash going into savings earns less. A builder holding both cash and a bond fund experiences this rate cut in two opposite directions at once: less income on the cash sleeve, a modest price gain on the bond sleeve. Neither move is large on its own, but together they describe exactly how a rate cut redistributes value across a diversified portfolio rather than simply making everyone better or worse off. A business owner weighing a fixed-rate SBA loan against a variable-rate bank line now has a Fed openly signaling a preference for lower rates ahead, a data point worth weighing against the certainty a fixed rate provides. The brick laid on December 10 is one of several stacked through 2025\. Each one shifts the cost of capital slightly, and a builder's plans for the next decade rest on the accumulated wall, not any single brick alone. ## THE WATCH Watch the Fed's next scheduled meeting, January 27-28, 2026, for whether the committee cuts again, holds, or signals a pause. Watch also the December jobs report and the December CPI report, both due in January, since the Fed has been explicit that incoming data will decide the next brick's shape. A builder now knows the exact rate his cash, his business credit line, and his bond funds are all measured against heading into 2026, a number that will not move again until at least late January. ### Sources Federal Reserve issues FOMC statement, December 10, 2025 (Federal Reserve): FOMC Press Conference, December 9-10, 2025 (Federal Reserve):