Fed cuts interest rates by 25 basis points, and signals that a rate cut in December is not certain
Risks to US inflation are tilted to the upside while downside risks to employment have increased.
Hi!
Welcome to Seven Fat Cows, the newsletter that aims to help subscribers invest profitably in fixed income, currency and cryptocurrency markets.
Today is 30 October 2025.
And in today’s post, I will mention key points from yesterday’s Fed meeting as well as highlight recent headlines.
If you are new here, I provide an investment idea at the end of every article.
18 out of 20 of my ideas were profitable as of 24 October 2025.
Before we proceed, here is a very important note:
We all have different risk tolerances.
Please read my disclaimer before proceeding at https://sevenfatcows.substack.com/tos
If you recall, in my previous post on 27 October 2025, I said that the Futures market was expecting a 25 basis point cut at the FOMC meeting, and that was exactly what the Fed did.
The Federal Open Market Committee decided to lower the policy interest rate by one quarter percentage point.
They also decided to conclude the reduction of their aggregate securities holdings as of 1st December.
This chart displays the total assets of the US Federal Reserve from 2008 to 2025.
The orange box shows that the Fed has been reducing the size of its balance sheet since 2022.
However, the Fed would stop doing that with effect from 1st December as the effective Fed Funds rate has been trading above the rate on reserve balances.
The Fed said that higher tariffs is lifting the price of certain goods, resulting in higher overall inflation.
In contrast, disinflation appears to be continuing for services.
In recent headlines, record rainfall in Vietnam triggered floods and resulted in thousands of evacuations.
Copper prices reached record high levels on supply fears.
Samsung beefed up its advanced chip production after memory chip sales hit record high.
The Indian Rupee is trading near a record Low as a Fed-Driven strong US dollar weighs on prices.
Private equity deal value hits record 310 billion US dollars as confidence returns.
Japan’s anime market hits a record 25 billion US dollars, driven by global boom.
HSBC warns of pressure in Hong Kong office property market amid defaults.
Electrotherm (India) Limited has reported a loan default of Rs 10.45 crore as of 30 September 2025. This development comes as part of the company’s ongoing financial restructuring efforts and settlement arrangements with asset reconstruction companies (ARCs).
UPS lays off 48,000 as restructuring accelerates.
In my previous post, I recommended buying XRP/USDT at 2.61.
But cryptocurrencies have been under selling pressure due to the stronger US dollar
And earlier today, I exited my XRP/USDT position at 2.578, resulting in a loss of 1.2%
It has been difficult trading crypto assets due to the increased volatility but I will continue to search for opportunities in the market.
So, what is attractive today?
I think that the iShares US dollar Treasury bond 0-1 year ETF is attractive, which is trading at a yield of 3.75%.
This ETF gives exposure to US Dollar denominated short term government bonds issued by the US Treasury.
It target US government bonds with remaining maturities between zero and one year.
The Fund is essentially a parking vehicle for putting your cash to work.
Given the positive outlook on the US dollar, you could potentially enjoy the added gain from currency if you switch out from your local currency, in addition to the fund’s yield-to-maturity of 3.75%.
Thank you so much for reading the article.
Have a nice day!
Disclaimer
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