Last Federal Reserve Meeting in 2025 Preview: What do Financial markets expect?

The Federal Reserve is preparing for its last meeting of the year following a hiatus in November. Expectations are largely indicating a 25 basis-point cut on interest rates to 3.75%, with markets keeping an eye on both the rate decision as well as the press conference that follows.

Investors will also look for any incongruencies in the Fed’s members’ opinions on interest rates, which is a crucial signal for whether the central bank is truly independent in its decisions as US President Donald Trump puts more pressure on the Fed to cut rates faster.

Similarly, central banks in Canada and Switzerland will also hold their last meeting of 2025 under complex circumstances for the latter, where inflation stalled around zero.

Markets will also await China’s inflation readings for last month, expecting it to rise slightly while trending under the target rate, an indicator of the government’s progress in stimulating the domestic economy.

Key takeaways:

• The Fed’s last meeting of 2025 and possible important signals regarding member opinions.
• A relatively quiet week for Europe on the economic data front.
• Canada and Switzerland’s last central banks meeting of the year.
• China’s inflation report, with a slight tick anticipated.

2025’s Last Federal Reserve Meeting: Impact on Global Financial Markets

1. The US economy: The Fed’s last meeting of 2025

Markets around the world are bracing for this week’s Fed meeting, the most significant central bank meeting among the three to hold one (the US, Canada, and Switzerland), with near certainty of a quarter-point cut, supported by weak employment reports. It’s also worth noting that the Dow Jones has hit record highs as markets await the Fed meeting and a potential rate cut.

At the same time, anxiety in the technology sector is rising after Oracle’s stock plunged nearly 30% in just two months, its sharpest correction in years. The drop has shaken investor confidence and intensified concerns about whether the AI sector is overheating.

However, the most closely watched aspect of the FOMC meeting will be the opinions of its seven voting members. There’s a notable division among Fed members on whether to cut rates or keep them unchanged in order to combat inflation, which remains above the Fed’s 2% target rate. If this division proves factual, the rate cut trajectory is likely to slow even further.

The Fed will also publish its well-known dot plot showing the opinions of 19 Federal Reserve members on potential rate cuts for comparable quarters over the next three years. If we revisit the first three dot plot reports this year, the one published during the third quarter show greatest division, coinciding with the appointment of Stephen Miran to the Fed, who advocated a 1.25% rate cut.

After the Fed meeting, the highly anticipated press conference by Fed Chair Jerome Powell was held, especially as he stated in his last speech on October 29 that a rate cut in December is not guaranteed. Markets will look for any signs of next year’s rate cuts by Powell, but October economic data remains missing, with November’s data delayed till after this wek’s meeting.

Key upcoming US economic data for this week include:

• November consumer inflation expectations
• September job openings
• September trade balance

2. The EU economy: The Swiss Central Bank holds a meeting.

The eurozone’s economy reported a 0.3% growth rate in the third quarter of this year, exceeding primary expectations, while Europe’s grew by 0.4% month-over-month for the same period, with Denmark recording the continent’s highest growth at 2.3%, followed by Luxembourg and Sweden at 1.1% each. On the flip side, Finland’s and Ireland’s economies contracted.

As for the euro, it rose against the US dollar due to rising bets of the upcoming interest rate cuts in the North American nation, closing the gap between the two major currencies.

This week will be a rather quiet one on the European front, except for Switzerland’s interest rate decision. The European nation is facing a major inflationary challenge, reaching very low levels at 0%, way below the Swiss National Bank’s interest rate target range of 0%–2%.

3. The Japanese economy: Between fiscal hope and a fragile domestic scene

Japan remains to face a challenge to combat high inflation, with the Japanese government approving a large budget to stimulate the domestic economy, despite the domestic demand remaining weak and fragile, especially after household spending contracted for the first time in six months.

All the while, Japan is still battling tensions with its neighbor to the east, China, which can damage key economic sectors in Japan, like the fishing business, tourism, and hospitality.

In addition, Japan is experiencing vulnerabilities in semiconductors due to geographic concentration and reliance on rare minerals, placing significant pressure on the government to execute strategic plans described as burdensome given current conditions.

On the economic date releases front, Japan has some important reports to look out for. Most notably, Japan’s second reading of Q3 GDP, expected to confirm an economic contraction of 0.4%, along with industrial production figures.

4. The Chinese economy: Eye on inflation report

The recent trade truce with the US is expected to reflect positively on the Chinese exports after they previously declined from record levels in Q2, just as many countries intensified their trade with China just before US tariffs in April.

Analysts expect inflation in China to continue to increase in November after returning to positive territory last month, supported by fading food price effects.

Markets will watch China’s inflation trajectory closely, as boosting domestic demand remains a central government priority in order to stimulate growth, strengthen self-reliance, and attract foreign investment.

The economic calendar following Last Fed’s Meeting in 2025