Fed Meeting Live Updates: Markets Want Powell To Signal Multiple Rate Cuts Ahead In 2026

China's latest inflation data sent mixed signals through global markets. Consumer prices rose 0.7% year-on-year, the fastest pace in nearly two years. Yet producer prices fell 2.2%, extending a deflation trend that has lasted four years. This split shows how uneven China's recovery remains. Moreover, higher food costs lifted headline inflation, while weak demand still pushed factory prices lower. As a result, markets worry that China's domestic demand remains fragile. Analysts note that oversupply in sectors such as coal and energy continues to weigh on prices. And although Beijing supports consumption through targeted stimulus, it avoids broad measures. Therefore, China's growth path still looks uncertain. Investors now wait for the Central Economic Work Conference to see whether policymakers shift toward stronger support in 2026.

China's Weak Demand and Its Ripple Effect on Global Markets

Markets reacted quickly to China's inflation data. The Hang Seng and CSI 300 both fell as investors reassessed the country's economic momentum. Japan's Nikkei and South Korea's Kospi also slipped, highlighting how sensitive Asia-Pacific markets are to China's signals. Lower factory-gate prices show that manufacturers still struggle with excess supply. This weakness limits China's ability to drive regional growth. And while exports remain strong, domestic spending lags behind. That imbalance pressures companies across Asia. At the same time, global traders are watching the FED. With a widely expected rate cut of 0.25%, investors hope for a softer U.S. dollar, which could lift emerging markets. Still, uncertainty remains high as inflation and growth trends diverge across regions.

China's AI Talent Surge is Redefining Global Competition

The race for AI talent is heating up, and China is gaining ground fast. The country produced 3.57 million STEM graduates in 2020—more than four times the U.S. total. This surge is reshaping how tech companies recruit and innovate. Chinese firms are also securing more U.S. patents, with Huawei ranking among the top global players. Universities and industry are working closer together to push AI development and reduce reliance on foreign technology. As a result, China is developing competitive AI models at a fraction of the cost of U.S. systems. This shift signals a major change in tech leadership. Talent and data scale give China an edge even as the U.S. maintains a lead in high-end chips. Yet both markets depend on stable geopolitical conditions, and rising tensions will shape the next phase of AI innovation.

Why AI, Energy, and Talent Matter for Markets and the FED

The global AI race also affects financial markets and monetary policy. Companies require massive computing and electrical power to train advanced models. Analysts warn that the U.S. could face energy shortages before it runs out of GPUs. Meanwhile, China appears better positioned on the power front, giving it another strategic advantage. These shifts matter because AI drives productivity, investment flows, and corporate earnings. Markets respond to every new breakthrough. Furthermore, the FED follows these trends closely as they influence long-term inflation and growth. As AI spreads across industries, it could lift productivity but also disrupt jobs. Policymakers must balance innovation with economic stability. Therefore, the FED's decisions on rates and future guidance will shape how quickly AI investments accelerate.

What Investors Should Watch Next

Investors now stand at a crossroads. China's inflation shows early signs of stabilization, but deflation risks remain. Its AI momentum is strong, yet global competition is fierce. Markets are waiting for the FED to deliver clarity on its rate path. A softer stance could lift risk assets worldwide. However, persistent inflation in the U.S. may limit how far the FED can go. Meanwhile, Asia-Pacific markets remain highly sensitive to China's economic signals. As a result, traders must track both macro data and technology developments. The combination of China's domestic challenges, the AI talent race, and the FED's policy moves will set the tone for markets in 2025.

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Source: Reuters

Europe Vs US natural gas prices: The paradox that lies within

US natural gas price technical analysis

Source: invezz

Source: cnbc

The Bank of Canada held its key policy rate steady at 2.25% on Wednesday as widely expected, and Governor Tiff Macklem said the economy was proving resilient overall to the effect of U.S. trade measures.

Despite tariffs between 25% and 50% on some critical sectors such as cars, lumber, aluminum and steel, Canada's economy has shown signs of strength.

Third quarter annualized GDP grew by 2.6%, much more than expected, while employment data showed the economy added 181,000 new jobs between September and November.

"So far, the economy is proving resilient," Macklem said in opening remarks to reporters, adding that inflationary pressures continue to be contained. Overall inflation is just above the bank's 2% target.

"Governing Council sees the current policy rate at about the right level to keep inflation close to 2% while helping the economy," said Macklem.

Uncertainty remains high and if the outlook changes, the bank is ready to respond, Macklem said, reiterating comments he made when the bank cut rates in October to their current level.

The U.S. Federal Reserve will also announce a rate decision on Wednesday and a majority of economists expect it will cut rates by 25 basis points.

Macklem said even though the economy had shown some resilience, he expected GDP growth to be weak in the fourth quarter and hiring intentions to be muted.

While the economy is adjusting to tariffs, volatility in trade and quarterly GDP numbers are making it more difficult to assess the underlying momentum of the economy, Macklem noted.

The recent data has "not changed our view that GDP will expand at a moderate pace in 2026 and inflation will remain close to target."

Andrew Kelvin, Head of Canadian and Global Rates Strategy at TD Securities called the bank's commentary a fairly cautious tone.

"It leads me to be very comfortable with the idea that the bank will be on hold for quite some time," he said.

CHOPPINESS IN INFLATION

The consumer price index eased to 2.2% in October but economists have regularly flagged that measures of core inflation, which strips out volatile components, have stayed around 3%, the top end of the BoC's inflation target.

In the months ahead, the BoC expects some choppiness in headline inflation which would push inflation temporarily higher in the near term.

But Macklem said the ongoing economic slack would roughly offset these cost pressures. He said the bank expects the growth in final domestic demand to resume after registering a flat growth in the third quarter.

The Canadian dollar weakened after the announcement and was trading down 0.13% to 1.3865 to the U.S. dollar, or 72.12 U.S. cents. Yields on the two-year government bonds fell 3.3 basis points to 2.556%.

Source: Reuters

An overview of Caracas amid rising tensions between the administration of U.S. President Donald Trump and Venezuela's President Nicolas Maduro's government, in Caracas, Venezuela, November 27, 2025. REUTERS/Gaby Oraa

President Donald Trump's top national security advisers briefed members of Congress about the administration's campaign against suspected Venezuelan drug traffickers on Tuesday, as the president suggested he could extend U.S. military operations to Mexico and Colombia.

Secretary of State Marco Rubio, Secretary of Defense Pete Hegseth, Chairman of the Joint Chiefs of Staff Dan Caine and CIA Director John Ratcliffe held a classified briefing for Congress' "Gang of Eight" representing intelligence committee and Senate and House of Representatives leaders from both parties after members of Congress clamored for more information.

Democrats emerged from the meeting dissatisfied. "I asked them what their strategy is, and what they were doing, and again, did not get satisfying answers at all," Senate Democratic Majority Leader Chuck Schumer of New York told reporters after the briefing.

Republicans mostly declined to comment beyond saying they were still studying the issues.

Trump said in a wide-ranging interview with Politico conducted on Monday that he could extend anti-drug military operations to Mexico and Colombia and hinted at land operations in Venezuela. He also took aim at Europe, including another call for Ukrainian elections and support for Hungary's leader.

Trump repeatedly declined to rule out sending troops into Venezuela as part of an effort to bring down President Nicolas Maduro. Asked if he would consider using force against targets in other countries where the drug trade is highly active, including Mexico and Colombia, Trump said: "I would."

MONROE DOCTRINE 2.0

The U.S. military has massed much of its naval strength in the southern Caribbean since early September, conducting at least 22 strikes on boats in waters around Venezuela that have killed nearly 90 people.

The campaign has come under heightened scrutiny in recent days as details emerged of a September 2 decision to launch a second strike on a suspected drug boat that killed survivors of the first attack.

Trump's comments in the Politico interview reiterated much of his world view outlined in the sweeping national security strategy released last week that seeks to reframe the country's global role.

That strategy, which aides called the Trump Corollary to the 19th-century Monroe Doctrine asserting U.S. dominance in the Americas, focused on the U.S. reasserting itself in the Western Hemisphere while warning Europe that it must change course or face "erasure."

"They're weak," Trump told Politico, referring to Europe's political leaders. "They want to be so politically correct."

A spokesperson for the European Commission, asked about Trump's comments, defended the bloc's leaders and said the region remained committed to their union despite challenges such as Russia's war in Ukraine and Trump's tariff policies.

In the interview, Trump again said he thought it was time for Ukraine to hold elections as the war nears its four-year mark. Ukraine is expected to share a revised peace plan with the U.S. later on Tuesday, one day after hastily arranged talks with European leaders.

He also said he did not offer a financial lifeline to the government of ally Hungarian Prime Minister Viktor Orban, who met with Trump last month at the White House.

"No, I didn't promise him, but he certainly asked for it," he said.

Source: Reuters