The minutes of the Federal Open Market Committee (FOMC) meeting held on December 9–10, 2025, published on December 30, reveal that Fed officials closely monitored the risk of short-term liquidity shortages. Although participants generally viewed the economic backdrop as comfortable and investors mostly expected a quarter-point rate cut at the December meeting, the discussion extended beyond just the interest rate level.
Overview of the December 2025 FOMC Meeting Minutes
The minutes list key discussion topics, including market expectations for rates and the condition of short-term funding markets. Participants noted that investor expectations for rate cuts changed little during the intermeeting period, with the current federal funds target range at 3.50%–3.75%.
Federal Reserve's Concerns About Short-Term Funding
The minutes repeatedly highlight signs of tightening in short-term funding markets, where banks and other financial firms borrow and lend cash overnight for daily settlements. A central focus was the decline in reserves: the minutes indicate reserves have fallen to what the Fed considers "ample" levels, where conditions may become more sensitive to small fluctuations in demand.
Warning Signs and Seasonal Factors
The minutes list several warning signals: elevated and volatile overnight repo rates, widening gaps between market rates and Fed-administered rates, and increased use of standing repo operations. Additionally, Fed staff pointed to seasonal factors that could further drain reserves at year-end and during large Treasury inflows.
Federal Reserve Measures to Support Liquidity
To reduce the risk of liquidity tightening, participants discussed alternative tools: initiating purchases of short-term Treasury securities aimed at maintaining "ample" reserve levels and improving the operation of the standing repo facility as a regular part of the operating framework. Surveys cited in the minutes expected purchases of about $220 billion in the first year; these purchases are intended to support market functioning and rate control, not to change monetary policy.
Market Expectations and Fed's Next Steps
Markets are now focused on the next policy decision: the current federal funds target range is 3.50%–3.75%, and the next FOMC meeting is scheduled for January 27–28, 2026. According to CME Group's FedWatch tool, traders at the time of publication assigned an 85.1% probability that the Fed will keep rates unchanged.
Why This Matters
For miners operating 1–1000 devices, news about the Fed's short-term liquidity is primarily a marker of the market's financial stability: liquidity tightening can temporarily affect credit availability and the volatility of financial instruments used for hedging or settlements. However, there is no direct indication of a monetary policy change in the minutes—the discussed Treasury purchases aim to smooth the market, not alter the rate.
What To Do?
A short, pragmatic plan for miners: first, monitor FOMC announcements and data on the target rate range, as well as the CME Group's FedWatch tool showing probabilities of decisions. Second, if you use credit lines or short-term loans for operations, assess your business's sensitivity to liquidity disruptions and adjust cash buffers if necessary.
Finally, if you're interested in the Fed's decisions' impact on the crypto market and mining profitability, check out our materials on the Fed rate cuts and on the Fed policy's impact on Bitcoin, where these issues are discussed in the context of 2026. Also useful is the general cryptocurrency forecast for 2026 if you are planning your strategy for the year ahead.