As the financial world held its breath, investor jitters reached a fever pitch in anticipation of the Federal Open Market Committee (FOMC) decision. Did they expect a gentle nudge or a heavy-handed grip on the monetary reins? The outcome? A hawkish surprise that sent shockwaves through the markets, shaking asset classes and traders alike with significant movements. With the dust settling on this pivotal announcement, let’s delve into the essential economic updates and examine how various asset classes responded to the shifting tides of monetary policy. So, where are the markets headed next? Buckle up, because it’s going to be quite a ride! LEARN MORE.
Investor jitters were in play ahead of the highly-anticipated FOMC decision, which then delivered what many interpreted to be a more hawkish than expected announcement, sparking huge moves across the financial markets.
Here are the economic updates you need to know and how asset classes reacted.
Headlines:
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U.K. headline CPI up from 2.3% year-on-year to 2.6% in November as expected; core CPI rose from 3.3% year-on-year to 3.5% (3.6% forecast)
- U.K. PPI input prices flat in November (0.2% m/m uptick expected, 0.1% previous); PPI output prices rose 0.3% m/m (0.2% expected, -0.1% previous)
- Euro area final core CPI reading unchanged at 2.7% y/y in Nov as expected; final headline CPI downgraded from 2.3% y/y to 2.2% vs. expectations of no change
- ECB official Wunsch said that impact of potential tariffs depends on exchange rate, with larger EUR depreciation limiting the negative effect
- ECB official Lane reiterated importance of going on a meeting-by-meeting approach to rate changes, disinflation well on track
- U.S. building permits rose from 1.42M to 1.51M in Nov (1.43M expected); housing starts fell from 1.31M to 1.29M (1.35M forecast)
- U.S. EIA crude oil inventories fell 0.9M barrels (-1.6M expected, -1.4M previous)
- FOMC cut rates by 0.25% from <4.75% to <4.50% as expected, added wording on “timing and extent” of future policy moves
- Fed dot plot projections of interest rates suggested one less cut in 2025 than previously indicated
- New Zealand GDP showed 1.0% q/q contraction in Q3 2024 (-0.2% expected, previous reading downgraded from -0.2% to -1.1%)
Broad Market Price Action:

Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView
Most asset classes started off in tight consolidation as traders bit their nails ahead of the Fed decision, with the exception of bitcoin which cruised lower from the get-go. Asian equities were mixed, as investors also awaited China’s policy updates, as well as the Bank of Japan’s statement later in the week.
Meanwhile, Treasury yields settled a few basis points lower while traders lightened positions but soon surged higher, with the 10-year yield jumping 11 basis points to 4.49%, after the U.S. central bank sounded more optimistic than expected.
In turn, the sharp move higher in yields likely contributed to significant pressure on equity markets, with the S&P 500 suffering its worst decline of the year at a 2.4% slump while the Russell 2000 saw an even steeper 5% tumble.
Gold also underwent substantial downside pressure from a stronger dollar while crude oil managed to stabilize around $70.10, capping off back-to-back declines, after finding some support from API’s reported inventory decline of 4.7 million barrels but soon retreated after the EIA showed a smaller reduction of 0.9 million barrels.