Following the final October meeting (October 28–29, 2025), the FOMC calendar still lists December 9–10, 2025. This means the Fed could technically still act once more this year.

Market and economist expectations, according to surveys and money market prices, still position a high probability of a cut in December in addition to October. Several major economists also still project two cuts before the end of the year.

Powell hinted that monetary policy tightening could end within a few months. This is a looser tone and is compatible with further policy easing if accompanied by supportive data.

The job market remains a determining factor. If hiring weakens and unemployment rises again, the Fed is likely to increase cuts to stem the economic slowdown.

If core inflation remains low or at least does not flare up again, there is still room for further cuts. Conversely, a surge in inflation could force the Fed to hold back.

For financial conditions and money markets, if signs of a liquidity shortage (repo/funding) become increasingly apparent, an earlier end of the quarter, even before December, could signal a non-interest rate easing that accompanies policy interest rates.

Data uncertainty and the delay in official data releases due to the shutdown force the Fed to rely on alternative indicators, thus strengthening its cautious tone.

Stocks typically favor lower interest rates, especially growth/tech stocks, as discount rates decline. However, the euphoria could be tempered if economic data weakens further.

The US dollar tends to weaken if the market perceives the Fed as increasingly dovish (low USD yields). However, if a rate cut occurs amidst severe risk-off, the USD could strengthen as a safe haven.

Gold and crypto benefit from declining real yields and looser liquidity, but gains could be limited if the USD strengthens sharply or the Fed turns out to be less supportive than expected.

Source: Newsmaker.id