The Federal Reserve on Wednesday is set to lower borrowing costs again, even as stark divisions persist within the central bank’s powerful rate-setting committee.

The Federal Reserve will soon unveil its December rate decision. Analysts expect multiple dissents alongside another quarter-point rate cut.

The S&P 500 ended the news conference 0.8 percent higher and trading at a record high. Expectations for further interest rate cuts have ticked up from yesterday but only marginally. The two-year Treasury yield, which is sensitive to changes in interest rate expectations, fell a little less than 0.1 percentage points.

The Federal Reserve is trying to navigate the dual economic threats of lagging employment sector and persistent inflation.

The Federal Reserve is expected to cut its influential fed funds rate this afternoon for the third time in as many meetings. Follow along with our live coverage of the Fed meeting.

Wall Street strategists are generally pretty optimistic about the prospects for stocks in 2026. But this sunny outlook is very much dependent on the Federal Reserve's monetary policy maneuverings, as Deutsche Bank's Jim Reid pointed out in commentary shared with MarketWatch on Tuesday.

Major stock indexes jumped while U.S. Treasury yields declined on Wednesday after the Federal Reserve cut interest rates as expected and investors remained hopeful about further cuts ahead, even as the central bank signaled it will likely pause reductions for now.