Stock Market: Fed policy review on Oct 28–29; is 2nd straight 25 bps rate cut coming?
Nomura said the likely Fed rate cut move was clearly telegraphed by the September dot plot, as well as recent Fedspeak from Powell and other core FOMC voters.
- Oct 24, 2025,
- Updated Oct 24, 2025 5:33 PM IST
Stock market investors will keenly follow the US Federal Reserve's policy review next week, where the US central bank is expected to deliver a second consecutive 25 basis points cut. Nomura believes Fed Chair Jerome Powell’s press conference will likely reiterate some easing bias. But it expects him to push back modestly on a December cut as definite, insisting that policy decisions will be made meeting-by-meeting.
The Fed had on September 17, 2025, cut its target interest rate by 25 bps.
"We expect an announcement ending QT at this meeting. Recent signs of pressure in funding markets suggest reserves are no longer “abundant,” accelerating the timeline for ending QT and an eventual pivot to reserve management purchases. We expect MBS rundown to continue, with proceeds reinvested into treasury bills. A preset cut," Nomura said.
The foreign brokerage said the likely Fed rate cut move was clearly telegraphed by the September dot plot, as well as recent Fedspeak from Powell and other core FOMC voters.
Jefferies in its latest Greed & fear not said there has been some evidence of liquidity stresses in the US money markets of late. Indeed Fed Chairman Jerome Powell referred to such in his comments as regards the pending end of quanto tightening last week, Jefferies said.
Jerome signaled on October 14 at an annual meeting of the National Association for Business Economics in Philadelphia that quantitative tightening, in terms of shrinking the Fed balance sheet, may end “in coming months”.
More precisely, he said: “Some signs have begun to emerge that liquidity conditions are gradually tightening, including a general firming of repo rates along with more noticeable but temporary pressures on selected dates.
"What are these symptoms? The most obvious has been growing resort in recent months to borrowing from the Fed’s Standing Repo Facility (SRF), set up back in July 2021 after a squeeze in the repo market in September 2019 triggered one of the more dramatic of Powell’s pivots. This marked the end of the Fed chairman’s first attempt at quantitative tightening. Since there is a bit of a stigma to borrowing from the SRF, this should be seen as “last resort” borrowing," it said.
Jefferies said the latest episode of quanto tightening is coming to an end while, in GREED & fear’s view, it is surely only a matter of time before the Fed resorts again to balance sheet expansion.
Stock market investors will keenly follow the US Federal Reserve's policy review next week, where the US central bank is expected to deliver a second consecutive 25 basis points cut. Nomura believes Fed Chair Jerome Powell’s press conference will likely reiterate some easing bias. But it expects him to push back modestly on a December cut as definite, insisting that policy decisions will be made meeting-by-meeting.
The Fed had on September 17, 2025, cut its target interest rate by 25 bps.
"We expect an announcement ending QT at this meeting. Recent signs of pressure in funding markets suggest reserves are no longer “abundant,” accelerating the timeline for ending QT and an eventual pivot to reserve management purchases. We expect MBS rundown to continue, with proceeds reinvested into treasury bills. A preset cut," Nomura said.
The foreign brokerage said the likely Fed rate cut move was clearly telegraphed by the September dot plot, as well as recent Fedspeak from Powell and other core FOMC voters.
Jefferies in its latest Greed & fear not said there has been some evidence of liquidity stresses in the US money markets of late. Indeed Fed Chairman Jerome Powell referred to such in his comments as regards the pending end of quanto tightening last week, Jefferies said.
Jerome signaled on October 14 at an annual meeting of the National Association for Business Economics in Philadelphia that quantitative tightening, in terms of shrinking the Fed balance sheet, may end “in coming months”.
More precisely, he said: “Some signs have begun to emerge that liquidity conditions are gradually tightening, including a general firming of repo rates along with more noticeable but temporary pressures on selected dates.
"What are these symptoms? The most obvious has been growing resort in recent months to borrowing from the Fed’s Standing Repo Facility (SRF), set up back in July 2021 after a squeeze in the repo market in September 2019 triggered one of the more dramatic of Powell’s pivots. This marked the end of the Fed chairman’s first attempt at quantitative tightening. Since there is a bit of a stigma to borrowing from the SRF, this should be seen as “last resort” borrowing," it said.
Jefferies said the latest episode of quanto tightening is coming to an end while, in GREED & fear’s view, it is surely only a matter of time before the Fed resorts again to balance sheet expansion.