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Markets Jump as Investors Bet on Cheaper Borrowing Ahead
New York Fed President John Williams sent markets buzzing after his November 21 remarks suggested that interest rates may not stay high for much longer. He described current policy as “modestly restrictive” and noted there was “room for further adjustment” soon. Investors took that as a clear sign that a December rate cut is back on the table.
The reaction was instant. The probability of a 25 basis point cut jumped to 79 percent, up from 42 percent just a week earlier. Stocks bounced after a rough stretch, with the S&P 500 rising 1 percent and the Nasdaq up 1.7 percent to close the week. The Dow added 493 points, reversing part of a broader week-long slide caused by delayed economic data.
Online chatter exploded as traders celebrated the shift. Many pointed out how quickly sentiment turned, and tech giants had a strong day, with the group often called the Mag 7 climbing more than 2 percent.
The big question now is whether December will deliver the cut that markets are expecting. Investors see a more welcoming environment for risk, while some Fed officials still prefer caution. With economic reports slowly returning after the shutdown delays, the next few weeks will shape the Fed’s final call for the year.
