2026 Historical Review: The December 2025 Fed Meeting was the final chapter of the transition year. For Kansas City families now exploring 2026 mortgage opportunities, this meeting provides the crucial backstory for why rates have stabilized at their current levels after the unusually divided 9-3 vote that closed out last year.
🏛️ The December Decision: A Deeply Divided Fed
The FOMC’s vote was far from unanimous, revealing a significant split that now dictates the 2026 outlook. The 9-3 vote featured the most dissent seen in years, highlighting the tension between cooling the labor market and fighting “sticky” inflation:
- The Push for More: Governor Stephen Miran dissented in favor of a larger 0.50% cut, citing risks to the softening job market (with unemployment reaching 4.6% in late Q4).
- The Call for a Pause: Notably, Kansas City Fed President Jeffrey Schmid and Chicago’s Austan Goolsbee voted against the cut, preferring to leave rates unchanged. Schmid expressed concern that core inflation, holding near 2.8%, remains too high to justify aggressive easing. You can track this progression in our Fed Meeting Archive.
📉 Why Rates Stabilized Near 6% in Kansas City
It is a common misconception that mortgage rates move in lockstep with the Fed. In the wake of the December meeting, Kansas City borrowers have seen a “stabilization” effect rather than a “freefall” for three key reasons:
- Already Priced In: Much of the December cut was anticipated. As a result, current mortgage rates in Kansas City have held steady in the low-6% range rather than dropping further.
- The “Neutral Rate” Milestone: Chair Powell suggested the Fed is approaching the “neutral” level—where rates neither stimulate nor slow growth. This signals that the era of rapid rate drops has ended. (See our 2026 Rate Forecast).
- Local Inventory Gains: In the KC Metro, we are seeing an 8.9% increase in local inventory as homeowners who were previously “locked-in” to 3% rates finally find 6% to be a manageable transition point.
🔮 2026 Outlook: What KC Buyers Should Expect
The Fed’s year-end Summary of Economic Projections (SEP) suggests a much slower pace for 2026. Most housing authorities now expect rates to hover between 5.9% and 6.3% throughout the first half of the year. For Kansas City families in neighborhoods like Overland Park and Lee’s Summit, the “wait and see” strategy is becoming risky as rising home prices may eclipse any marginal interest savings.
🚀 Your Post-Fed Action Plan
To navigate the 2026 market with the data from this final 2025 meeting:
- Run the Numbers: Use our Affordability Calculator to see how 2026’s stabilized 6% range affects your monthly payment.
- Verify Your Equity: If you currently have a rate above 7.25%, a mortgage refinance could now be financially beneficial.
- Get a Local Perspective: National news misses the 10th District nuance. Consult with Rick Woodruff for a personalized rate quote tailored to the current 2026 environment.
Interest Rate Resource Center
Historical Meeting Resources: 2025 Analysis
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December 2025: The “Holiday Pivot” & 2026 Rate Forecast – The Fed concludes the year with a final 0.25% cut and a roadmap for a “soft landing” in 2026.
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October 2025: Labor Market Focus & The End of Quantitative Tightening – A second consecutive 0.25% cut as the Fed shifts priority to stabilizing the job market.
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September 2025: The First Major Rate Pivot of the Post-Inflation Era – The historic move that ended the “Higher for Longer” cycle and revitalized the KC housing market.
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July 2025: The “Summer Hold” & Sticky Inflation Data – Why the Fed paused mid-summer to evaluate the impact of new trade tariffs on consumer prices.
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June 2025: Mid-Year Projections & The “Dot Plot” Revision – Analysis of the Fed’s updated economic projections and what they signaled for fall mortgage rates.
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May 2025: Wait-and-See Approach for Core Services – The Committee maintains the funds rate at 4.25%–4.50% while monitoring cooling rent prices.
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March 2025: Volatility & The “Last Mile” of the Inflation Fight – Market reactions to the Fed’s warning that the final push to 2.0% inflation would be the hardest.
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January 2025: Setting the Stage for a Transition Year – The first meeting of 2025 emphasized balance as new regional bank presidents joined the rotation.