Fed reveals interest rate outlook in December 2025, US stocks fluctuate in opposite directions

Wall Street fluctuates after the Fed's new policy decision. (Source: CNN)

The Fed also announced it would resume limited purchases of US government bonds, after money markets showed signs of liquidity shortages - a situation the Fed had said it would try to avoid.

By a 10-2 vote, the Fed lowered its key interest rate to a range of 3.7-4.00%, marking the second rate cut this year, as expected by investors. The move is seen as an attempt to prevent further weakening of the labor market - a growing concern within the Fed.

The Fed's decision comes as the US federal government remains shut down, prompting the Fed to admit it has difficulty accessing full economic data.

The bank was forced to rely on unemployment figures from August 2025 – the most recent official jobs report.

However, the Fed said current indicators still show that the US economy is growing at a moderate rate.

According to the announcement, from December 1, the Fed will maintain the total size of its balance sheet on a monthly basis, but adjust the portfolio structure by reinvesting proceeds from maturing mortgage-backed bonds (MBS) into short-term government bills.

* According to Reuters news agency, US stocks fluctuated in opposite directions in the trading session on October 29, after the Fed cut interest rates.

The market opened in the green and rose further after the Fed cut interest rates. However, after Mr. Powell's speech, investors reduced their expectations for the possibility of the Fed continuing to cut interest rates in December 2025, with the probability of only 71%, compared to 90% previously.

Specifically, at the end of this session, the Dow Jones index decreased 74.37 points (0.16%) to 47,632 points; the S&P 500 was almost unchanged at 6,890.59 points; and the Nasdaq increased 130.98 points (0.55%) to 23,958.47 points.

Nvidia shares rose 3% to $207.04, giving the company a market value of $5.03 trillion. Nvidia shares have risen more than 50% this year, leading a wave of investment in artificial intelligence on Wall Street.

Source: https://baoquocte.vn/fed-he-lo-trien-vong-lai-suat-trong-thang-122025-chung-khoan-my-bien-dong-trai-chieu-332706.html