Highlights

  • The Fed cut policy rates, but the ECB left rates unchanged at 2% in October. 
     
  • The BoJ also kept rates unchanged at 0.5% after the January hike earlier this year.
     

  • The BoE is expected to cut rates in December 2025; no move is expected this week.

     

RC-2025.11.03- Fed cuts rates in october-graph

In this edition

At its October meeting, the Fed cut rates by 25bp to 3.75–4.00%, with Kansas Fed President Schmid dissenting in favour of keeping rates unchanged and Governor Miran preferring a larger cut. This reflects diverging views within the committee, with some members worried about inflation while others are more concerned about the slowing labour market.

At his press conference, Chair Powell said a December cut is not a foregone conclusion. They also announced the end of quantitative tightening -- that is, Fed balance sheet reduction to reduce the amount of liquidity in the economy -- from December. We judge that downside risks to the labour market are likely to prevail, potentially leading the US central bank to cut rates once more in December and twice next year, although we cannot rule out political pressure that may lead to more cuts. The rate path will also depend on the extent to which tariffs are passed on to consumers and on the speed of deceleration of services inflation.

Key dates

 

3 Nov

China manufacturing PMI, US ISM manufacturing PMI

 

 

6 Nov

BoE interest rate decision, Germany industrial production
 

 

 

7 Nov

US non-farm payrolls and unemployment rate, China trade balance

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