Market Highlight 30.10.2025

The Federal Reserve lowered its policy rate for the second consecutive meeting, though Chair Jerome Powell expressed skepticism about the likelihood of further rate cuts in December, while announcing that the balance sheet reduction program will conclude on December 1. The latest 25-basis-point cut brings the Federal funds rate down to a range of 3,75% - 4%, the lowest level in three years, compared with the peak of roughly 5,5% maintained last year. The move aims to stem the recent weakening of the U.S labor market, a challenge made more complex by the lack of economic data resulting from the ongoing U.S Government shutdown. The FED faces multiple uncertainties surrounding the U.S economic outlook, amid global trade tensions and the absence of regular macroeconomic reports. The rate cut was approved by a 10/12 vote within the Federal Open Market Committee (FOMC). Kansas City FED President Jeffrey Schmid voted against the decision, favoring no change in rates, while FED Governor Stephen Miran also dissented, advocating for a larger 50-basis-point reduction.

The USD strengthened slightly on Thursday after markets tempered expectations for another rate cut in December, following Powell’s comments. Market-implied odds of an additional 25-basis-point cut in December fell to around 68%, down from nearly 100% prior to the FED Chair’s remarks on Wednesday evening.

The interbank USD/VND rate continued to trade steadily within the 26.300 - 26.330 range yesterday, with the effective ceiling rate set at 26.345. The market is expected to remain stable around 26.300 throughout today’s session.

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