US Data Surge, Fed Rate Cuts & FTSE 100 Rebound: Key 2025 Insights for IG UK Traders
- US economic growth holds steady at 1.9% YoY in 2025, but job adds slow to 119k in Nov, signaling caution amid delayed data from the shutdown.
- Fed slashes rates by 25bps to 3.5%-3.75% in Dec, with just one more cut eyed for 2026—hawkish tone tempers easy money hopes.
- FTSE 100 bounces 1.1% to 9,751, led by banks and miners, as BoE cut bets rise despite weak UK GDP.
- Traders on IG UK can capitalise, with tools like spread betting on FTSE futures amid global risk-on vibes.
- Inflation lingers at 3%, pressuring households but boosting rate-sensitive sectors like retail in the rebound.
Introduction: Riding the Waves of Global Markets in a Turbulent 2025
Picture this: it’s mid-December 2025, and you’re sipping your morning tea, scrolling through your IG UK app. The headlines scream chaos—US government shutdowns delaying key data, the Federal Reserve slicing rates yet again, and suddenly, the FTSE 100 is clawing its way back from a rough patch. It feels like a rollercoaster, doesn’t it? One minute, you’re worried about sticky inflation eating into your savings; the next, you’re eyeing opportunities in a rebounding London index. As a trader or investor glued to IG UK’s platform, you know these moments aren’t just news—they’re your chance to make smart moves.
Let’s rewind a bit. The year 2025 kicked off with promise. AI hype drove spending on tech gear and data centres, pushing US GDP growth to a solid 1.9% year-over-year. Affluent folks cashed in on roaring stock markets, keeping consumer wallets open. But cracks appeared fast. Job growth turned sluggish, unemployment ticked up to around 4.5%, and inflation hung stubbornly above the Fed’s 2% target at about 3%. Then came the shutdown—a 43-day mess that stalled data releases, leaving markets guessing. It’s like trying to drive blindfolded; no wonder volatility spiked.
Enter the Federal Reserve. On 10 December, they dropped the federal funds rate by a quarter-point to 3.5%-3.75%, the third cut of the year. It was a “hawkish cut”—easing a bit, but signaling caution ahead. Chair Jerome Powell rallied nine votes for it, but three dissented, preferring to hold steady. The dot plot? Just one more 25bps trim in 2026, then another in 2027, landing at a long-run 3%. Why the restraint? Inflation’s cooling, but not cool enough—headline CPI at 3%, core PCE at 2.8%. Tariffs from the new administration are filtering in, nudging prices up. And with GDP forecasts bumped to 1.7% for 2025 (from 1.6%), the economy’s resilient, not desperate.
Across the pond, the FTSE 100 was feeling the pinch. After two weekly dips, it slumped to 9,633 by late last week. Weak UK GDP—down 0.1% in October, services shrinking 0.3%—didn’t help. But global vibes shifted. The Fed’s dovish undertone sparked a risk-on rally in Europe. By 15 December, the FTSE jumped 1.1% to 9,751.31, outpacing the Euro Stoxx 50’s fresh highs. Banks like HSBC (+1.8%) and miners like Fresnillo (+4%) led the charge, betting on Bank of England (BoE) cuts—now priced at 60bps by end-2026.