Soft US inflation boosts Fed-cut expectations

Tuesday, October 28, 2025 at 08:00 UTC+01:00 (+0100), United States, Washington, D.C.

News category : Macroeconomic Events

On October 28, markets turned more dovish on Fed policy as weaker-than-feared inflation data heightened expectations for a near-term rate cut. Softer inflation removed some pressure on the Federal Reserve, supporting growth assets like equities and reducing demand for safe-haven Treasuries. Interest rate futures traders sharply increased the probability of a 25-basis-point cut. The bond market rallied, yields dropped, and credit spreads tightened, while equities—especially cyclicals—benefited from the repricing. Analysts noted that while a dovish Fed gives relief to risk assets, it also raises the bar for strong economic data, making the policy outlook highly sensitive to upcoming macro releases.

Overall market impact

Strong bullish market impact - strength score : 90/100

Detailed breakdown of market impact over instruments, sectors, and asset classes

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Impacted instruments :

US Treasury yields

Interest rate futures

US equities

USD FX pairs

Credit spreads

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