Latest Finance-Economy News
Federal Reserve Likely to Cut Interest Rates in December
The Federal Reserve is expected to reduce the federal funds rate by 0.25%, lowering it to 3.50%-3.75%. This rate cut aims to ease borrowing costs for consumers and businesses, supporting economic growth amid ongoing concerns about inflation and labor market conditions. Limited October and November economic data make the decision less certain, but a cut is probable according to CME FedWatch at nearly 90% chance.
Labor Market Shows Signs of Softening but No Immediate Alarm
Recent data reveal moderate job growth, rising unemployment rates, and a slowdown in hiring and quits, indicating softness in the labor market. Despite these signals, economists note the labor market is holding and not deteriorating sharply enough to cause alarm. The Fed's balancing act involves supporting jobs while monitoring inflation risks closely.
President Trump Highlights Progress on Inflation and Cost Reduction
President Trump claims substantial progress in reducing inflation — with inflation cut by more than half since taking office — alongside sharply falling gas prices and increasing real wages. Efforts include historic tax cuts, deregulation saving Americans billions, and reduced housing costs with lower mortgage rates and rents. The administration emphasizes ongoing initiatives to further alleviate consumer expenses and strengthen the economy.
Wall Street Awaits Federal Reserve Statement as Markets Remain Cautious
U.S. stock indices ended nearly flat ahead of the Fed’s interest rate decision, with slight losses in the Dow Jones and small gains in Nasdaq. Rising Treasury yields challenge equities as economic reports indicate stronger-than-expected job openings and business sentiment, fostering cautious investor sentiment focused on Fed projections for 2026 policy.
US Personal Income and Outlays Show Moderate Growth in September 2025
The U.S. Bureau of Economic Analysis reported a 0.4% increase in personal income ($94.5 billion) in September 2025, reflecting stable household earnings. Meanwhile, the trade deficit narrowed significantly in August due to increased exports and decreased imports, indicating some strengthening in external economic activity.
Delayed Economic Data Releases Affect Fed’s Policy Outlook
Government shutdown impacts delayed release of key economic indicators including October Consumer Price Index and November jobs data. As a result, Fed policymakers rely on recent surveys such as JOLTS and employment cost indexes to gauge the economy, complicating the December meeting's decision-making process.
Inflation Risks Ease, Potential Deflation Concerns Arise
With falling home prices, growing rental supply, and declining crude oil prices, the inflation risk has receded, and some analysts point to emerging deflationary pressures that the Fed must consider in its forthcoming monetary policy decisions.
Corporate America Adapts to Anticipated Rate Cuts and Economic Conditions
Businesses anticipate easing borrowing costs following potential Fed rate cuts, enabling more investment and hiring. This may support consumer spending and contribute to a more balanced economic expansion, though uncertainties about inflation and labor markets persist.
Small Business Sentiment Improves Amid Job Market Fluctuations
Recent economic reports show an uptick in small business confidence despite ongoing labor market softness, suggesting resilience in certain economic sectors even as hiring stabilizes or slows in others.
Legislative and Regulatory Measures Aim to Strengthen Economic Foundations
Government initiatives focus on streamlining permitting, workforce development, environmental oversight, and economic strategy reforms to enhance economic growth capacity and address structural challenges.