Financial Markets Update 11 December 2025
FED bows to political pressure
News Overnight
China’s CPI and PPI date went unnoticed as the FED hogged the limelight, and there was a glimmer of hope as YoY CPI came in at 0.7%, higher than expected and driven by recovering food prices. But deflation has really got a hold.
The FED delivered 25bps cuts as expected but the markets were blindsided by just how dovish the presser was. And the message is clear: rates are going lower and we’ll do our bit to bail out the Federal Government. I hope that Powell, on retirement in May, doesn’t look back at this presser as contaminating his legacy.
Meanwhile over the border Canada held rates with an upbeat assessment of Canada’s economy that is not justified.
Breaking
Fed cuts rates to three-year low after fractious meeting [FT]
Japan denies report it rebuffed EU’s plea to join Russian asset plans [Reuters]
US-Indonesia trade deal at risk of collapse [FT]
US bank regulator says large banks engaged in ‘debanking’ of disfavored industries [Reuters]
Investors expect relief in money markets as Fed resumes T-bill purchases[Reuters]
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