Take Two: Fed split on future rate path; stocks continue to rise

What do you need to know?

Federal Reserve (Fed) policymakers expressed “a range of views” about the likely future path of monetary policy, the minutes of the latest meeting showed. The Fed cut interest rates by 25 basis points (bp) to a range of 4.0%-4.25% in September, with almost all the 12-strong committee supporting the decision and one voting for a 50bp reduction. The move reflected concerns over inflation and weakness in the labour market, the minutes revealed. Two further 25bp reductions are forecast this year, according to the Fed’s average projection. Expectations of further rate cuts helped the S&P 500 and Nasdaq indices reach new highs. 

Around the world

A weakening US dollar, the rise of artificial intelligence and attractive valuations have helped emerging market stocks enjoy their best rally in more than 15 years, according to a Financial Times report. Year to date, the MSCI Emerging Markets index has risen 30% while the MSCI World index is up 18%.* The report added that September’s US interest rate cut helped boost appetite for local currency government bonds – issuance across emerging markets, excluding China, reached a record $286bn this year. Meanwhile, the price of gold hit a fresh high after breaking through the $4,000 per ounce mark.

*In US dollar terms, on a net return basis. Source: FactSet, data as of 9 October 2025

Figure in focus: 34.3%

Renewable energy overtook coal as the world’s main electricity source during the first half of 2025, according to a report from energy think-tank Ember. The analysis showed renewables’ share of electricity rose to 34.3% from 32.7% compared to the same period last year while coal’s share fell to 33.1% from 34.2% and although global electricity demand rose by 2.6%, emissions dropped slightly in the first six months of 2025. Declines in China and India reflected clean generation growth outpacing demand. However, emissions rose in the European Union and the US compared with the same period last year.

Words of wisdom

Super Golden Week: An eight-day period in China when the country’s National Day overlaps with the Mid-Autumn festival, creating a ‘Super Golden Week’. One of China’s busiest travel periods, this month’s celebration saw a boom as citizens reunited with their families or took the opportunity for a holiday. According to reports, domestic tourism over the eight-day period totalled 888 million trips, generating some 809bn yuan ($113.8bn) in revenue, up 108bn yuan, year on year. The additional spending could provide a boost to China’s beleaguered economy which is enduring sluggish consumer spending amid trade tensions and deflationary pressure.

What’s coming up?

The World Bank and International Monetary Fund hold their annual meetings from Monday through to Saturday. On Monday, China issues import and export data. On Tuesday the Reserve Bank of Australia publishes its September monetary policy meeting minutes – at last month’s meeting policymakers kept the cash rate at 3.6%. In addition, the UK reports its latest unemployment figures and the Redbook Index on US retail sales is released. Wednesday sees China and the Eurozone respectively report inflation and industrial production figures. The bloc follows up on Friday with September’s final inflation numbers - a flash estimate showed Eurozone annual inflation rose to 2.2% from 2.0% in August.