Markets Bet on December Cut, PPI Takes Center Stage

Daily Market Insights – November 25, 2025, brought to you by Ultima Markets.

Today’s market narrative is defined by a decisive shift in sentiment. The “Higher-for-Longer” fears that triggered last week’s sell-off are rapidly fading, replaced by renewed optimism that the Federal Reserve may deliver a rate cut in December.

Waller Fuels Aggressive December Cut Bets

The key driver in global markets is the sharp change in tone from Federal Reserve leadership, led by Governor Christopher Waller following several dovish remarks from Fed officials last week, including NY Fed President John Williams.

• Waller’s Dovish Signal: On Monday, Governor Waller—one of the most influential voices on the committee—explicitly indicated support for a rate cut at the December meeting. He noted that current policy is “well-positioned” to restrain demand, but warned that maintaining restrictive rates for too long could risk unnecessary labor-market damage.
• The Shift: This marks a notable departure from the “Hawkish Pause” stance seen just days earlier. Waller’s remarks signal that the Fed is looking past the distortion created by shutdown-delayed data and instead focusing on the broader, consistent disinflation trend.
• December Odds Surge: Following his comments, the market aggressively repriced expectations. CME FedWatch now places the probability of a December 25-bps cut at around 80%, making a cut the new base case.

Dollar Under Pressure Near 100-Level

The U.S. Dollar is facing rising downside pressure as markets price in a more accommodative Fed stance. The Dollar Index has been hovering around the 100.00 level for four consecutive sessions, unable to decisively break higher.

USDX, Daily Chart | Ultima Markets MT5

This tight consolidation reflects uncertainty ahead of key data.A break below 100.00 would likely trigger renewed near-term dollar weakness, while a sustained move above 100.00–100.30 remains the threshold for any bullish recovery.

The upcoming PPI release may be the catalyst needed to firm market expectations on the Fed’s policy path and determine whether the dollar can regain momentum.

PPI: Decisive Inflation Gauge

With the U.S. government shutdown effectively cancelling the release of reliable October CPI data, the market is now operating without its most important inflation indicator. This places unusual importance on today’s release of the September Producer Price Index (PPI).

Since CPI is “out of the picture,” the PPI becomes the only dependable proxy for current inflation dynamics. As a measure of wholesale-level price pressures, movements in PPI often flow downstream into consumer prices.

• A soft PPI reading—in line with or below the 0.3% forecast—would reinforce Waller’s dovish message, strengthen the case for a December rate cut, support risk assets, and likely add further downward pressure on the U.S. Dollar.
• A hotter-than-expected PPI would challenge the emerging dovish narrative, revive volatility, and potentially push the Fed back toward a more cautious “wait-and-see” stance.

Market Impact: Risk-On Returns, Dollar Under Pressure

The resurgence of dovish expectations has triggered an immediate rotation across global asset classes. The prospect of cheaper liquidity has revived risk appetite, with the Nasdaq and S&P 500 rebounding as investors rotate back into tech and growth stocks that were hit hard last week. The “Fed Put” is re-emerging, offering valuation support.

The shift is also boosting crypto markets. As a high-beta asset class highly sensitive to global liquidity trends, Bitcoin and Ethereum are seeing renewed demand. However, the broader recovery in cryptocurrency remains uneven.

BTCUSD, Daily Chart | Ultima Market MT5

From a technical perspective, Bitcoin needs to reclaim the 90,000 psychological level to confirm improved sentiment and unlock further upside momentum.

Daily Market Takeaways

The market has shifted from “Fear of the Fed” to “Betting on the Fed.” Today’s PPI release will deliver the final verdict. If the data aligns with expectations, the path is open for a pre-holiday rally across equities and crypto, likely at the expense of the U.S. Dollar.

Still, uncertainty remains. If the PPI fails to show signs of easing inflation, the recent risk-off sentiment could quickly return. In that scenario, the December rate cut may no longer be viewed as the base case—potentially triggering renewed pressure on equities and high-beta assets, while supporting further upside in the dollar.

Disclaimer

Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided.