Market Highlight 20.11.2025

The divide over whether the U.S Federal Reserve should cut interest rates in December widened at last month’s meeting, with a larger number of policymakers opposing an additional rate cut. The Minutes showed growing concerns over whether rising inflation or higher unemployment presents the greater risk to the U.S economy. Last month, the FED voted 10/2 in favor of cutting rates by 0,25 percentage points, bringing the Federal Funds rate to 3,75% - 4%. The split has been exacerbated by the recent U.S Government shutdown, which delayed the release of key labor market and inflation reports. Without guiding data, it has become increasingly difficult for members with divergent views to reach consensus. The USD Index rose nearly 0,6% yesterday, climbing above 100 points. The USD also strengthened sharply, gaining almost 0,4% against the euro and 1,1% against the yen.  

On Wednesday evening, the U.S Government canceled the release of the October employment report after certain data could not be collected during the shutdown, and rescheduled the November report for December 16 - after the Federal Reserve’s final policy meeting of 2025. Following the revised data calendar, market expectations for a December rate cut declined. Markets now price in only about a 25% probability of a 0,25-percentage-point rate cut at the December 10 meeting, compared with 40% just a day earlier.  

The State Bank of Vietnam kept the central reference rate unchanged yesterday, corresponding to an effective ceiling rate of 26.388. The interbank market traded within a narrow band around the ceiling rate throughout the day and is expected to maintain this pattern today.

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