Markets and Economic Updates for November 2025: Easing Ahead? The Fed, Inflation, and What's Next

Each month, senior leaders from Hancock Whitney Asset Management gather to share their insights on the evolving economic landscape and financial markets. The discussion explores key events driving market performance, potential risks, and future expectations across asset classes. This month’s webcast covered everything from Federal Reserve policy shifts and the ongoing government shutdown to employment trends, inflation dynamics, and the outlook for stocks and bonds. To gain a deeper understanding of these topics and how they might impact portfolios, listeners are encouraged to access the full webcast recording.

Watch the November 2025 Markets and Economic Webinar

Key Highlights from the November Webcast:

• Prolonged Government Shutdown: Economic Risks Building
  • The government shutdown continues, nearing record length, with little immediate resolution in sight.
  • Pressure is building from federal unions, food assistance shortfalls, and disrupted air traffic operations.
  • Treasury balances have grown unusually large, indicating a liquidity drain from the broader economy, which could ripple into consumption and corporate operations if unresolved.
• U.S. Economy: Strong Q3, Slower Q4 Ahead
  • Despite shutdown noise, Q3 GDP growth is estimated between 2.5–3.0%, driven by strong consumer spending and tech-sector capital investment.
  • Q4 outlook is more cautious (1–1.5% growth), as consumer savings dwindle and spending softens.
  • Employment gains are slowing, though not collapsing, with immigration policy and lower labor demand both weighing on hiring momentum.
• Federal Reserve: Cautious Easing Amid Data Fog
  • The Fed cut rates again in October, citing weak employment trends, despite lingering inflation concerns.
  • Internal Fed disagreements are growing—some officials want faster cuts; others urge caution due to sticky inflation.
  • The December cut is no longer a foregone conclusion. Fed Chair Powell likened current policy-making to “driving in fog,” favoring a slower approach until clearer data emerges.
• Bond Market: Solid October, but Winds Shift
  • Bond markets had another good month, up ~0.6% in October, with year-to-date gains now exceeding 6.5%.
  • Powell’s pushback on December cuts and rising dissension among Fed members caused rates to jump late in the month.
  • Looking ahead, bondholders can expect to collect income, but further price appreciation may be limited as Treasury issuance weighs on longer-term rates.
• Equity Markets: Momentum Remains Strong
  • The S&P 500 rose ~2.3% in October, with large-cap tech stocks continuing to dominate performance.
  • Emerging markets surged 4%, while small- and mid-cap stocks lagged slightly for the month.
  • Strong earnings, ongoing AI-related capital spending, and improving small-cap profit trends are fueling investor optimism, despite elevated valuations (~22.9x forward earnings) and geopolitical uncertainty.
• Trade and Tariff Policy: Toward Stability, but Risks Remain
  • A rare earth export agreement with China and fresh trade deals with Asia signal easing tensions.
  • The U.S. reduced tariffs related to fentanyl-linked trade with China in exchange for extended rare earth exports and soybean import commitments.
  • The Supreme Court is reviewing the legality of tariffs under the International Emergency Economic Powers Act, which could result in significant tariff rebates or renewed trade barriers via alternate legal avenues.

 Be sure to listen to the full recording of the webcast to hear how our investment leadership team breaks down these developments and what they could mean for portfolios going forward.