Markets have a knack for keeping investors on their toes, but the week leading up to November 29, 2025, was a whirlwind even by Wall Street’s standards. The anticipation of a December interest rate cut by the Federal Reserve sent shockwaves through global financial markets, with the world’s top investment banks, central bankers, and traders scrambling to adjust their forecasts and positions. Add to that the latest twists in the technology sector—where Google’s AI ambitions made headlines—and you’ve got a week that truly tested the nerves and wits of market participants.
According to Reuters, JP Morgan and Goldman Sachs, two of the world’s most influential financial institutions, have now aligned their outlooks: both expect the Federal Reserve to lower its key interest rate by a quarter percentage point following its meeting on December 9-10, 2025. This marks a notable shift, especially for JP Morgan, which had previously abandoned its December forecast after turbulent September jobs data. The reversal, as chief U.S. economist Michael Feroli explained, was prompted by recent comments from central bank officials. "We now believe the latest round of Fedspeak tilts the odds toward the Committee deciding to cut rates in two weeks," Feroli wrote, as cited by Reuters.
Goldman Sachs echoed this sentiment in a separate note, noting that with no major economic data releases scheduled before the Fed’s December meeting, the previous employment reports "may have sealed a 25 basis points cut." The consensus among these Wall Street giants reflects a broader recalibration across the market, as traders digest every word from central bankers and every tick in the data.
This market pivot is closely tied to signals from the Federal Reserve itself. New York Fed President John Williams, speaking at an event in Chile, described the current U.S. monetary policy stance as "modestly restrictive" and suggested there is "room for a further adjustment in the near term" to guide policy towards a more neutral setting. Williams acknowledged that while progress on inflation has "temporarily stalled" around 2.75%, the labor market has cooled to levels not seen since before the pandemic. "Downside risks to employment have increased… while the upside risks to inflation have lessened somewhat," he said, offering a nuanced view of the economic landscape.
Williams also pointed to external pressures, estimating that recent tariffs have added as much as 0.75 percentage points to the current inflation rate. Nevertheless, he maintained that underlying inflation is on a downward trajectory, a view that appears to have reassured both markets and policymakers. The CME Group’s FedWatch tool, which tracks market sentiment, showed traders were pricing in an 84.7% chance of a rate cut as of November 28, 2025—evidence of just how quickly expectations can shift.
Not everyone within the Fed is marching in lockstep, however. According to Benzinga, Fed Governor Stephen Miran has reportedly advocated for more aggressive easing, though he has signaled he would support a standard quarter-point cut to avoid "inflicting real harm" on the economy. This internal debate underscores the delicate balancing act facing the central bank: how to support growth and employment without letting inflation spiral out of control.
The market’s response has been swift and dramatic. Following the Thanksgiving holiday, the futures for the Dow Jones, S&P 500, and Nasdaq 100 indices all traded higher ahead of a shortened trading session on Friday, November 29. The SPDR S&P 500 ETF Trust (SPY) closed up 0.69% at $679.68 on November 27, while the Invesco QQQ Trust ETF (QQQ), which tracks the Nasdaq 100, advanced 0.88% to $614.27, according to Benzinga Pro data. Investors seem to be betting that easier monetary policy will provide a tailwind for equities, at least in the near term.
The Business Times painted a vivid picture of this market drama, noting that traders swung "from gloom to near euphoria" as the odds of a December rate cut increased. The podcast Market Focus Weekly, hosted by Emily Liu, brought in investment expert Cheng Chye Hsern to help decode the week’s events. As Cheng pointed out, "markets are still reacting to noisy data," and the sudden shift in rate cut expectations was driven by a combination of softer U.S. jobs data and candid remarks from senior Fed officials. In his view, the volatility reflects a market that’s still searching for clarity amid a barrage of information and speculation.
But interest rates weren’t the only story. The technology sector also saw major developments, with Google’s rollout of Gemini 3—a significant leap in artificial intelligence—and rumors that Meta might adopt Google’s tensor chips. These moves have the potential to reshape the competitive landscape in the AI race, a fact that investors and analysts alike are watching closely. As The Business Times noted, "the new shape of the AI race" is now a key theme for markets, with leadership in this space still very much up for grabs.
Beyond the U.S., central banks and currencies were also in the spotlight. Japan sent mixed signals, with rising inflation, a tight labor market, and a weaker yen pushing the Bank of Japan toward possible action, even as political leaders urged caution. Meanwhile, the Indian rupee stumbled and Singapore’s state investor Temasek found itself rethinking its exposure to the U.S. dollar, highlighting how currency moves are now just as important as equity swings for global investors.
For many, the past week’s market rollercoaster was a reminder of how quickly sentiment can shift—and how interconnected the world’s financial systems have become. Investors are not only grappling with the immediate impact of Fed policy, but also with the broader implications of technological change and global economic realignment. As Cheng Chye Hsern remarked, "AI leadership is far from settled, and currencies can reshape returns." It’s a complex, fast-moving environment, where even the experts admit there’s more noise than signal.
As the Federal Reserve’s December meeting approaches, all eyes will remain on the central bank’s next move—and on the ripple effects that decision will send through markets, currencies, and industries worldwide. For now, traders, investors, and policymakers alike are bracing for what comes next, knowing that in this environment, surprises are almost guaranteed.
