Risk appetite in check as clock ticks down to Fed decision
An anxious mood prevails across markets ahead of the last Fed decision of 2025, says Chris Beauchamp, Chief Market Analyst at investing and trading platform IG.
Investors hunker down ahead of Fed decision
Indecision rules the roost in markets today, and indeed all week, as we await what Jerome Powell has to say. Hawkish cut, dovish hold, or a surprise? By the time the next Fed meeting rolls around, Trump may have made his pick to replace Powell, and so this might be the last one where the Fed chairman’s words really carry weight.
VIX heads lower for now
While the VIX drifts down, potentially easing the path for a risk rally, it is important to remember that the record of Fed cut days is mixed at best. Since the financial crisis the average return for the day is about -0.4%, but the parallels with last year are not great. Then Fed day saw steep losses – can Powell avoid the trap this time? This is the last big event of the year, aside from delayed payrolls next week, so investors will be hoping the Fed chair doesn’t spoil the festive period.
Author
