Market Highlight 11.12.2025

Federal Reserve officials agreed to cut interest rates for a third consecutive meeting but signaled that this may be the final reduction for now amid widening divisions over the path of policy ahead. The decision on Wednesday evening to lower the Federal funds rate by an additional 0,25% - to a range of 3,5% to 3,75%, the lowest level in 3 years - aims to shield the economy from a sharper-than-expected slowdown in hiring. The FED voted 9-3, marking the first time in 6 years that three policymakers dissented. Two members argued the rate cut was unnecessary, while another favoured a larger reduction of 0,5%. Against a backdrop of moderating inflation, the FED Chair stated that any further rate cuts would require evidence of a deeper deterioration in labour-market conditions. Forecasts also indicate that most FED officials expect at most one additional rate cut next year. Chair Jerome Powell’s term ends in May 2026, meaning he will preside over only three more meetings that set interest-rate policy.

U.S equities rose following the FED’s decision, in part because Chair Powell did not push back against the prospect of further easing as some had feared prior to the meeting. The Dow Jones Industrial Average gained roughly 1%, or 497 points, marking its strongest post-FED-decision performance since 2023. The S&P 500 rose 0,7%, and the Nasdaq Composite advanced 0,3%. Meanwhile, the USD Index declined 0,6% to 98,6.

On the interbank market, the USD/VND exchange rate fell back to 26.360 by the end of Wednesday’s session as VND funding costs remained elevated (above 7% across most tenors). The market may continue its downward trend today, with the expected trading range around 26.320 - 26.360.

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