NAB Morning Call Tech looks for Fed’s gift for Christmas
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Nov 24, 2025 Taylor Nugent, a NAB markets economist, shares insights on the tech sector's optimism surrounding a potential December Fed rate cut. He discusses the unique market sensitivity, contrasting equity gains with stagnant bonds and currencies. Nugent highlights comments from Waller on labor concerns that underpin these expectations, while examining the implications of outdated US data on market reactions. The Aussie dollar's sluggish performance amid rising US sentiment is also noted, adding to the intrigue of this financial landscape.
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Stocks Overreact To December Cut Hopes
- Equity markets show remarkable sensitivity to the prospect of a December Fed rate cut, driving big moves in tech stocks.
- This sensitivity isn't fully mirrored in bonds or currencies, suggesting a narrow market reaction.
Markets Are Vote Counting The Fed
- Market pricing is shifting because investors are 'vote counting' FOMC members in the absence of fresh data.
- A small core of the Fed still favours near-term easing, keeping cut bets alive despite dated data.
Waller's Labour Concern Fuels Cut Narrative
- Christopher Waller explicitly advocated for a December cut citing labour market concerns.
- His stance strengthens the dovish argument within the committee despite mixed views from other regional presidents.