Central banks are shifting gears. The Fed, ECB, and BoE have all turned more dovish heading into the end of 2025, and rate cuts are now widely expected. Inflation is cooling slowly but steadily, and bond yields are drifting lower. On paper, this should be a sweet spot for low-duration stocks: financials, energy, and defensives that lean on near-term cash flows rather than long-term growth stories.
The final week of October delivered a mix of central bank decisions, earnings results, and macroeconomic data. In the US, the Fed cut interest rates by 25 basis points at its 29-30 October meeting, lowering the target range to 3.75%-4.00%.
Why does November always get the benefit of the doubt? Is it a genuine market edge, or just a calendar-based placebo traders use when fundamentals go quiet?
The stage is set: inflation is finally cooling toward central-bank targets (US core PCE was ~2.1% in April), and major central banks are talking cuts. The Fed held rates in June 2025 but still pencilled in two quarter-point cuts this year.
The week was dominated by political uncertainty and mixed data across economies. In the US, a partial government shutdown dragged on into its third week, delaying many economic releases. Lawmakers hinted at possible resolution, but no breakthrough emerged before the weekend.
