Process Over Prediction: How Investors Should Approach Day One of the Fed’s Final 2025 Meeting

Day one of the Fed’s final 2025 meeting isn’t about making bold predictions—it’s about doubling down on discipline. As investors, your real advantage comes not from trying to outguess the next rate move, but from trusting and refining the process that shapes your decisions.

Why predictions won’t drive your returns

Over the next day or two, headlines will analyze every word from the Fed, and even the experts won’t agree on what’s coming next. The truth is, even professional investors rarely get short-term market moves right around Fed meetings—and what seems like the “correct call” only becomes clear after the fact. The real danger isn’t the meeting itself, but the temptation to ditch your plan and make emotional decisions.

Start with a clear portfolio blueprint.

Imagine your portfolio as your own business plan. You want to be able to clearly write down your target mix of stocks, bonds, and cash, and how each part supports your goals—be it retirement income, short-term needs, or long-term growth. When markets react to the Fed, that written plan is your anchor, reminding you that your investments are based on your goals and time horizon—not on tomorrow’s headlines.

Put rebalancing rules in writing.

Next, set clear rules for when and how you’ll rebalance. Maybe that means rebalancing when an asset class drifts a certain amount from your target, or just checking in on a set schedule. The important thing is to have these rules in place before any surprises hit, so when markets get choppy, you’re following a plan instead of reacting on the fly.

Manage risk, cash flow, and behavior

For most investors, the real risk isn’t a surprise from the Fed—it’s making a poorly timed move that locks in losses or costs you future gains. Your plan should spell out how much cash you keep for near-term needs, how much of a drop you’re willing to stomach, and what, if anything, would make you change course. Just as important, set behavioral guardrails: don’t make big changes based on one Fed meeting, give yourself a 24-hour pause before any big trade, and commit to reviewing your plan on a regular schedule—not just when the news gets dramatic.

How to use day one of the meeting

So what’s the best use of today? Take a few minutes to review your Investment Policy Statement—or jot down a simple one-pager if you don’t have one yet. Write out your target allocation, rebalancing rules, risk limits, and behavioral guidelines. Then, share it with your advisor or investment committee so you have someone to keep you accountable when emotions run high. When the Fed makes its announcement, your goal isn’t to predict the news—it’s to be ready for it, with a process that tells you exactly what to do next, no matter what happens.

Disclosure:

This material is for informational and educational purposes only and is not intended as investment, legal, accounting, or tax advice. It does not constitute a recommendation to buy, sell, or hold any security or to pursue any specific investment strategy. The views expressed are subject to change without notice and may differ from the views of other professionals or firms.

Investing involves risk, including the possible loss of principal, and no investment strategy or process can guarantee a profit or protect against loss in all market environments. Past performance is not a guarantee or reliable indicator of future results. Any references to interest rates, Federal Reserve policy, or market events are based on current conditions and may change as economic and market conditions evolve.

Before making any investment or financial planning decisions, investors should consider their individual circumstances and consult with a qualified financial, tax, or legal professional.

Sources:
https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm
https://www.federalreserve.gov/newsevents/calendar.htm
https://www.investopedia.com/next-fed-meeting-when-it-is-in-december-and-what-to-expect-11864286
https://www.investor.gov/additional-resources/general-resources/publications-research/info-sheets/beginners-guide-asset
https://www.troweprice.com/personal-investing/resources/insights/whats-the-best-approach-for-portfolio-rebalancing.html
https://www.vanguard.co.uk/professional/vanguard-365/investment-knowledge/portfolio-construction/when-multi-asset-investors-should-rebalance
https://www.fidelity.com/learning-center/trading-investing/the-fed-meeting

‍