On Investors’ Minds - APAC Edition U.S. Fed makes a second consecutive rate cut ... will they cut rates again in December?
Oct 31, 2025
The latest discussion covers the Fed's recent 25 basis point rate cut and its implications for the U.S. economy. Insights reveal a cautious Fed amid inflation risks and mixed economic signals. They explore potential future cuts and the influence of the government shutdown on decisions. The panel highlights global equity opportunities, the benefits of a diversified portfolio, and strategies for navigating fixed income and credit markets. Overall, they provide a comprehensive view of market dynamics and recommendations for resilient investing.
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Fed Cut But Signaled Caution
- The Fed cut rates 25bps but sounded more hawkish and fragmented with two dissents.
- Markets now price only ~16bps easing by December, shifting yields higher and flattening cut expectations.
Cut Was Insurance, Not A Pivot
- Powell framed the cut as a risk-management, insurance move amid persistent inflation risks.
- Fed sees modest growth and cooling labour momentum, keeping optionality for future meetings.
Temporary Inflation With Sticky Risks
- Inflation pressures look partly temporary but tariffs, fiscal rebates and core goods pass-through could lift inflation next year.
- Shelter disinflation and softer services ex-shelter temper the picture, creating mixed inflation dynamics.