The Federal Reserve cuts interest rates
The Federal Reserve announced a 25 basis point interest rate cut on December 7, 2025, lowering the target range for the federal funds rate to 3.50%-3.75%. This is the fifth rate cut since the beginning of the rate cut cycle in September 2024, aimed at addressing easing inflation pressures, a significant cooling of the labor market, and uncertainty in the economic outlook.
The impact of this rate cut on the economy is mainly reflected in the following aspects:
Stimulating economic growth: Lowering loan rates for businesses and individuals encourages consumption and investment, thereby boosting domestic demand in the United States.
Impact on global markets: A weaker dollar typically benefits commodities priced in dollars (such as gold and crude oil) and non-dollar assets, while it may also attract international capital into emerging markets.
Impact on the Chinese economy: Improved external demand, increased capital inflows, and opening up space for domestic monetary policy easing, which helps boost exports and stabilize financial markets.