Financial Markets Daily Report11 December 2025
As expected, the Federal Reserve lowered the federal funds rate by 25bp to 3.50%–3.75%. Following the announcement, Treasury yields fell, U.S. equities advanced, and the dollar weakened, leaving EUR/USD trading near 1.17. After three consecutive rate cuts, the Fed signaled it will likely pause to assess how the economy evolves.
Across the Atlantic, euro area markets traded cautiously ahead of the Fed decision—which came after the European close. Sovereign yields finished broadly unchanged, while equities edged lower, with the notable exception of Spain’s IBEX-35, which posted modest gains.
In other central-bank developments, the Bank of Canada held its policy rate at 2.25%, as widely expected, citing stronger-than-anticipated Q3 economic data. Meanwhile, in commodities, oil prices ticked higher after the U.S. seized an oil tanker off the coast of Venezuela, raising concerns about short-term supply disruptions.