MREIT Nov 2025

quick note to bring you up to speed what happened for the past 30 days

The Federal Reserve’s Further Rate Cut Decision

Imagine trying to drive through thick fog—you can’t see what’s ahead, and every move feels risky. That’s exactly what the Federal Reserve is doing right now. Their decisions about interest rates are creating waves in the US markets with ripples felt by the rest of the markets globally.

Not long ago, the expectation is – Federal Reserve would continue to cut interest rates in December. Now, that confidence has somewhat taken a step back.

The Fed’s voting members are split, and no one knows what they’ll decide. Here’s the catch: the Federal Reserve has 12 voting members, but their recent meeting minutes revealed that opinions are all over the place.

Some want big rate cuts, others want small ones, and many don’t want any cuts at all.

This kind of public disagreement is rare for the Fed, which usually tries to show a united front.

—

Why It’s Happening: A Tug-of-War Between Inflation and Jobs

The Federal Reserve has two big jobs: keep inflation low and make sure people have jobs.

Currently, both are going in the wrong direction.

Inflation isn’t dropping as fast as they hoped, and the labor market is getting a bit shaky.

The unemployment rate rose from 4.3% to 4.4% in September. Plus, job cuts are skyrocketing. In October alone, U.S. companies announced over 153,000 layoffs—a 175% jump compared to last year.

And it’s not just layoffs; more companies are planning even bigger cuts.

I am seeing the ripple effect play out in real time – just this week, a Malaysian couple working in Singapore for the past 15 years engaged me for advisory to explore retirement in Malaysia if they were to sell their 1800sqf home for $6 million, which has appreciated from $4 million since 2017. The trigger event? Husband’s expecting to be offered VSS as soon as Jan next year.

The Ripple Effect: Markets Don’t Like Uncertainty

This uncertainty is hitting stocks, bonds, and even crypt0 hard. One month ago, the odds of a December rate cut were nearly guaranteed. Now, they’ve dropped to just 39.5% according to CME Fed Watch Tool.

Why the shift? The Fed is struggling to make decisions without clear data. The recent US government shutdown caused a 44-day blackout in economic reports. Key numbers like inflation, GDP, and job stats were delayed, leaving the Fed to guess what’s really happening.

A Glimmer of Hope: QT Is Ending

Here’s one piece of good news: the Federal Reserve unanimously decided to stop shrinking its balance sheet, a process called quantitative tightening (QT). Ending QT means more liquidity in the financial system, which is good for all investment assets. But the real game-changer will be their decision on interest rates.

And this week, though, markets rebounded.

Even if the Fed doesn’t cut rates in December, there’s still hope for January. Right now, there’s a 70.1% chance they’ll cut rates at one of these two meetings. And there’s a smaller chance—19.9%—that they’ll cut rates at both.

TL;DR FAQ

Q: Why is the Federal Reserve divided on rate cuts?
A: Because inflation remains high, but the labor market is weakening, pulling policy in opposite directions with no clear consensus.

Q: What caused the recent confusion about the Fed’s intentions?
A: Vague language in the October minutes, delayed economic data due to US government shutdown, and conflicting Fed member opinions.

Q: How does ending Quantitative Tightening (QT) affect markets?
A: Ending QT stops the draining of liquidity from financial markets, providing a supportive environment for stocks, crypto, and precious metals.

Thank you for the support, and I wish you a very nice day. Take care.

Lieu

p.s. –

Keywords and Definitions

Federal Reserve (Fed): The US central bank responsible for monetary policy, including setting interest rates.

Interest Rate Cut: A reduction in the benchmark interest rate to stimulate economic growth.

Quantitative Tightening (QT): The process of shrinking the Fed’s balance sheet by selling assets or not reinvesting proceeds.

Dual Mandate: The Fed’s goal to promote maximum employment and stable prices (low inflation).

CME Fed Watch Tool: A market tool that calculates probabilities of Fed rate moves based on futures prices.

Government Shutdown: A period when US government operations are halted due to funding disagreements, delaying data releases.

Highlights

Pavilion REIT posts 20% profit growth in 3Q25 | The Star