U.S Market (12th Dec. 2025)
Market Starting Point Today:
“Rate cuts have begun — but the pace is slowing.”**
Following the Fed’s recent rate cut, markets have moved past the headline and focused on the speed and intent of the easing cycle.
Chair Powell acknowledged progress on inflation but made it clear that policy easing will not be automatic.
This cut should be viewed less as stimulus and more as the first step in policy normalization.
➡️ Market attention has shifted from “Did the Fed cut?” to “How long until the next cut?”
That distinction matters for valuations, discount rates, and volatility.
1) Immediate Market Reaction — USD Down, Yields Lower
Financial markets reacted quickly:
- U.S. dollar: weakened
- Treasury yields: declined across the curve
- Financial conditions: eased modestly
This was not a bet on accelerating growth.
Rather, it reflected relief that the Fed is not moving back toward tightening.
➡️ This is selective risk-on, not broad enthusiasm.
2) Global Factor — Oil Is Moving on Headlines, Not Fundamentals
Oil prices today were driven primarily by geopolitical headlines, not changes in supply-demand balance:
- Russia-Ukraine diplomatic commentary
- Middle East and Venezuela-related news flow
The takeaway:
- Oil is unlikely to reignite inflation
- But headline-driven volatility remains elevated
➡️ Neutral for inflation, negative for short-term market stability.
3) The Only Indicators That Matter Today
Ignore the noise. Today’s market is focused on four real signals:
① Fed communication shift
The cut signals policy normalization, not economic distress.
Markets are recalibrating expectations toward fewer, slower cuts.
② Dollar direction
Continued USD weakness supports EM assets and KRW short-term.
However, tariff or policy headlines could quickly reverse this.
③ Treasury yield momentum
The key is direction and speed, not absolute levels.
A stall or reversal in yields would quickly reprice equities.
④ Next CPI release
- November CPI: December 18
Until then, markets trade on expectations and interpretation, not data.
Analyst View — Today’s Judgment
Markets are operating under a soft-landing base case,
but without full conviction on policy follow-through.
In this environment:Assets that rallied purely on rate-cut expectations face higher volatilityCash-flow-proven large caps, defense, infrastructure, and quality growth remain relatively resilient
This is a position-management phase, not an all-in risk-on moment.
Disclaimer
This content is not investment advice. Investors are responsible for their own decisions.