Uncertainty Clouds Fed's December Rate Decision Amid Data Gaps

As of November 14, 2025, global markets are ending the week on a low note, with a continued selloff in Asia and Europe prompted by rising uncertainty stemming from the U.S. economy. Doubts are mounting about a much-anticipated December interest rate cut from the Federal Reserve, with the likely outcome now obscured by patchy data after Washington's recent government shutdown.

Wall Street experienced a bumpy trading session yesterday, with the S&P 500 and Dow Jones posting contractions of more than 1.6%, while the Nasdaq Composite fell by 2.3%. The VIX volatility index shot up by more than 20%, suggesting that skittish analysts expect the turbulence to continue.

Across the Atlantic, European markets were also down in early trading on Friday, with London's FTSE 100 and Madrid's IBEX 35 dropping by more than 1% each, and Germany's DAX falling 0.79%. In Asia, Japan's Nikkei 225 lost 1.77% at the end of the week, while the Shanghai Stock Exchange dropped 0.97% and Hong Kong's Hang Seng Index fell 1.85%. South Korea's KOSPI lost an eye-watering 3.81% as foreigners pulled their money out of the country.

Part of the unease in the market stems from the Federal Open Market Committee's (FOMC) final base rate decision at the end of the year. A month ago, investors were placing the likelihood at near-95% that Chairman Powell would announce a 25bps cut in the final Fed meeting of the year. However, these odds have steadily fallen and now sit at 50/50 for a cut or hold, per CME's FedWatch barometer.

The shift has come down to increasingly hawkish chatter from members of the FOMC, who are unlikely to have a clear picture of the economy come December 9. That's because the White House has already begun signaling that the data collected during the government shutdown is unlikely to be shared in full, potentially leaving policymakers at the Fed "flying blind at a critical period."