As we move closer to year-end, central banks across the globe have started adding fuel to financial markets — setting the stage for a potential Santa Rally in the final weeks of December. Here’s what we cover in this week’s market update: 🇦🇺 Australia – RBA Update The Reserve Bank of Australia kept the cash rate unchanged, maintaining a restrictive stance while closely monitoring inflation and labor-market conditions. Policymakers stressed that future decisions remain data-dependent, with no immediate signal of rate cuts. 🇯🇵 Japan – BoJ Outlook The Bank of Japan signaled a cautious approach, keeping policy flexible as it monitors inflation and wage growth. Officials played down expectations of an immediate policy shift, emphasizing upcoming data as the key driver. 🇺🇸 United States – FOMC Meeting One of the most important events of the week. The Federal Reserve cut interest rates by 25 basis points, while updated economic projections showed: • Higher GDP expectations • Lower inflation outlook for 2025–2027 • Stable unemployment and Fed funds rate expectations The dot plot reflected growing divisions among Fed officials. 🎙 Jerome Powell’s Remarks Fed Chair Jerome Powell stated that policy decisions will be made meeting by meeting, keeping flexibility as inflation remains above target. He highlighted a stable economy but acknowledged ongoing uncertainty. 🇬🇧 United Kingdom – GDP Update UK GDP fell 0.1% in the three months to October 2025 — the first contraction since late 2023. Weakness in production and construction, particularly in auto manufacturing, weighed on growth.
