Governor Miran’s lone dissent for a larger cut, the immediate end to QT, and this stealth QE launch together mark a powerful positive turn for fixed income
FinTech BizNews Service
Mumbai, 11 December 2025: The Federal Reserve delivered a widely anticipated 25 bps rate cut to 3.50–3.75% in a 9–3 vote (Governor Miran dissenting for a 50 bps cut; Goolsbee and Schmid preferring no change). One of the important stakeholders has shared his response to this development:
Deepak Agrawal, CIO-Debt, Kotak Mutual Fund:
“This development surprised markets by effectively restarting quantitative easing under the label of “reserve management purchases.” From December 12, the Fed will begin buying $40 billion of Treasury bills per month at an elevated pace “for a few months” before stepping down, while simultaneously terminating balance-sheet runoff on December 1 and removing all caps on standing overnight repo operations.
Critically, forward rate guidance and the median dot plot remained completely unchanged from September, still projecting only one 25 bps cut in each of 2026 and 2027 and a terminal rate of 3.0–3.1%, despite the addition of “extent and timing” language that reinforces the likelihood of an extended pause after the current move.
Overall, given the policy outcome contained very limited surprises on the rates side and delivered no dovish shift in forward guidance, bond yields saw no great move—the 10-year Treasury dropped to 4.16%. In this context, the sudden pivot to renewed balance-sheet expansion stands out as the clearest pro-bond development. Governor Miran’s lone dissent for a larger cut, the immediate end to QT, and this stealth QE launch together mark a powerful positive turn for fixed income. Given the slight dovish tint in the FOMC Indian govt bonds shall ease as well.”
