Driving in the fog

Macroeconomic update for November 2025

When the US Federal Reserve (Fed) cut interest rates by 25 basis points in October, the move was already widely expected. What may have caught markets off guard was Chair Jerome Powell’s comments that made it clear that another cut this year isn’t guaranteed amid differing views on risks and outlooks. The ongoing government shutdown has also left policymakers short on data and more cautious about what might come next. Powell emphasized the challenge of operating without a full set of economic data. “If you’re driving in the fog, you slow down,” he said, suggesting the data blackout could influence December’s meeting. For more details, watch the latest CIO Monthly video, in which the Multi Asset Boutique shares its views on the latest trends.  

  Key Takeaways  

1. The path forward?
   While the rate move may ease some near-term strain, the path forward remains murky. Investors continue to debate how much room the Fed has left to maneuver if growth weakens further or inflation fails to retreat.
2. Questions around AI
   AI-driven investments are now contributing more than 1% to US quarterly GDP growth, or about one-third of total growth. In other words, AI has become a key driver of the US economy. But does that mean we’re in a bubble?
3. 3. Staying the course  
   The Multi Asset Boutique has decided to refrain from making changes to its asset allocation, continuing to favor equities over bonds.
   
    

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