What's Happening: Fed Event + Key U.S. Data
Major U.S. events today:
Employment Cost Index release (labor cost/wage inflation data)
FOMC meeting: policy decision & economic projections at 2:00 PM ET
Follow-up Statements + Press Conference by the Chair
Weekly crude inventory data reported by the Energy Information Administration (EIA) at 10:30AM ET
With inflation still stuck high, the labor market trending softer, and worldwide macro uncertainty on the uptick, market participants are looking for Fed guidance, and the dot plot in particular, for cues on the path of future rates.
Market outlook by Asset Class
U.S. Dollar Index (DXY) - Bias: Medium Bearish
The dollar index is trading around 99.15-99.20 as of this morning, with dollar strength remaining subdued prior to the Fed decision.
If the Fed puts out a dovish message: USD is expected to weaken.
If the Fed follows a hawkish stance or less reduction:
Expect a temporary strength of the USD.
Overall, it appears that the dollar is vulnerable, except for a possible market surprise.
Gold (XAU/USD) — Bias: Medium-Bullish
Gold continues to be one of the major beneficiaries, since lower real yields and safe-haven demand are good for bullion. Lower interest rates, or at least a less hawkish monetary stance, are market expectations that benefit the appeal of gold.
Though the exact levels will depend on the Fed tone, a positive outcome will help gold move higher towards resistance levels, since investors will see it as a hedge against unclear Fed policies and a potentially weaker USD.
Oil (WTI) - Bias: Slightly Bearish to Neutral
As of December 10, 2025, the current WTI price around $58-59/bbl
Investors are waiting for the weekly inventory data of crude oil from the EIA. Because the supply of crude oil will continue worldwide, the growth of oil price seems restricted, apart from the unexpected reduction of inventory.
Other pressures include worldwide oversupply risks, together with the view of a strong dollar. Nevertheless, a dovish Fed could offer a short-term boost if it causes the dollar to soften or improvements the expectations of demand.
Broader Markets & Risk Sentiment
Being that the Fed is meeting today, the equity markets, along with risk assets, can expect volatile price actions. Though markets are faced with mixed sentiments and risk aversion prior to the Fed meeting, anything dovish can bring about a risk-on reset, but anything hawkish will simply see capital flow back into safe havens and the dollar.
Conclusion: high Stakes — Prepare for Volatility It is one of the most significant trading days of the quarter for the markets, thanks to the critical data out of the U.S. and the Fed's rate decision. The USD, the price of gold, the price of oil, and the risk markets are very sensitive to the markets’ interpretation of the Fed.
Investors and traders must be ready for sudden price movements, reversals, and range expansions throughout the day. Position sizing, risk, and readiness for swift reactions will matter the most.
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