Outpoll Weekly Recap: Finance (October 27 – November 2, 2025)

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The Federal Reserve held its ground this week, leaving rates unchanged in a move that was widely anticipated but nonetheless sent a clear signal: the fight against inflation isn't over, but the central bank is now firmly in a data-dependent holding pattern. Market participants, who had been nervously eyeing the latest PCE data, breathed a collective sigh of relief as the figures came in largely aligned with expectations, though the sticky components of core services continue to be a nagging concern for Chair Powell and his colleagues.This 'hawkish pause' provided the backdrop for a volatile week on Wall Street, where the S&P 500 struggled for direction, ultimately ending the period with modest losses as earnings season delivered a mixed bag. The tech-heavy Nasdaq felt the heat particularly from a handful of mega-caps whose forward guidance failed to meet lofty investor expectations, a reminder that even in an AI-driven market, valuation matters.Over in Europe, the ECB mirrored the Fed's cautious stance, though with a slightly more dovish tilt that pressured the euro and provided a brief tailwind for European exporters. The real action, however, was in the bond market, where the Treasury's quarterly refunding announcement was met with tepid demand, causing a noticeable steepening of the yield curve as long-term rates crept higher on concerns over the sheer volume of supply needed to fund the deficit.This recalibration in rates reverberated through currency markets, with the dollar index strengthening and putting pressure on emerging market assets. In the prediction market sphere, contracts tied to the timing of the first Fed rate cut saw significant volatility, with probabilities swinging wildly on each new data point and FOMC member comment, underscoring the market's hypersensitivity to the central bank's every word.Looking ahead, the consensus forming among the desks I speak with is that we're in for a period of range-bound consolidation in equities until we get clearer signs of a soft landing or, conversely, a reacceleration of inflation that forces the Fed's hand. It’s a classic 'wait and see' moment, reminiscent of the Buffett adage about being fearful when others are greedy—right now, the mood is decidedly neither, just cautious and watchful.

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