December 15–21, 2025: Weekly economic update

Over the past week, market sentiment remained broadly moderately positive. Recent U.S. macroeconomic data continue to support a soft-landing scenario: inflation is decelerating (consumer price indices showed a meaningful downside surprise), the labor market is gradually cooling, while economic growth remains resilient.

Labor Market

The BLS released employment data covering two months at once—October and November. In November, the labor market showed a modest rebound following a weak October. Overall, the data corroborate Chair Powell’s assessment that labor market conditions are cooling. Nonfarm employment growth is slowing, jobless claims are rising, and the unemployment rate increased to 4.6%.

At the same time, the Atlanta Fed estimates current GDP growth at approximately 3.5%.

Monetary Policy

• Policy rate unchanged; communication remains cautious.
• Stance: moderately restrictive → gradual transition toward neutral.
• The Fed continues to strike a balance: supporting financial markets while avoiding any explicit signal of an imminent or aggressive rate-cutting cycle.

The swaps market (FedWatch) continues its customary tendency to run ahead of the regulator, pricing in two rate cuts in 2026, with the first cut now shifted to the March meeting.

Macroeconomic Statistics

INFLATION (September)

• Core Consumer Price Index (CPI) (m/m): 0,2% (previous: 0.3%)
• Consumer Price Index (CPI) (m/m): 0.3% (previous: 0.4%)
• Core Consumer Price Index (CPI) (y/y): 2.6% (previous: 3.0%)
• Consumer Price Index (CPI) (y/y): 2.7% (previous: 3.0%)

Producer Price Index (September):

• PPI (m/m): 0.3% (prev: -0.1%)
• Core PPI (m/m): 0.1% (prev: -0.1%)

INFLATION EXPECTATIONS (MICHIGAN)

• 12-month expected inflation (December): 4.1% (prev: 4.5%)
• 5-year expected inflation (December): 3.2% (prev: 3.4%)

Core Personal Consumption Expenditures Price Index (September) — the Federal Reserve’s preferred measure of underlying inflation:

• m/m: 0.2% (prev: 0.2%)
• y/y: 2.8% (prev: 2.9%)

GDP (U.S. Bureau of Economic Analysis, BEA) — 2Q25 annualized, third estimate: +3.8% (second estimate: +3.30%; 1Q2024: – 0.5%). Atlanta Fed GDPNow estimate (4Q): 3.5% (vs. 3.9%).

(The GDPNow forecasting model provides a “real-time” proxy for the official GDP estimate ahead of its release, using a methodology broadly aligned with that of the U.S. Bureau of Economic Analysis.)

Business Activity Index (PMI) (December):

(Above 50 indicates expansion; below 50 indicates contraction)

• Services sector: 52.9 (previous: 54.1)
• Manufacturing sector: 51.8 (previous: 52.2)
• S&P Global Composite: 53.0 (previous: 54.2)

LABOR MARKET (November)

The labor-market data exceeded expectations across several indicators:

• Unemployment rate: 4.6% (prev: 4.4%)
• Total number of individuals receiving unemployment benefits in the United States: 1,897K (vs. 1,830K)
• Initial jobless claims: 224K (vs. revised 237K)
• ADP non-farm employment change: 64K (prev: -105K)
• Change in Private Nonfarm Employment (ADP): 69K (prev. 52K)
• Average hourly earnings (y/y): 3.5% (prev: 3.7%)
• JOLTS job openings: — (vs. 7.227M)

MONETARY POLICY

• Effective Federal Funds Rate (EFFR): 3.50%–3.75%
• Federal Reserve balance sheet increased: $6,556T ($6,535T at the time quantitative tightening was paused).

MARKET FORECAST FOR RATE (FEDWATCH)

• Next meeting (January 28): the implied probability of a 0.25% rate cut stands at 22.1%, while the likelihood of no change is 77.9%.
• Over the next 12 months: two 0.25% rate cuts are expected, bringing the target range to 3.00–3.25%.

Today:

А week earlier:

Market

SP500

Weekly performance: +0.10% (week-end close at 6,834.49). Year-to-date in 2025: +15.77%.

NASDAQ100

Weekly performance: +0.59% (week-end close at 25,346.18). Year-to-date return: +20.01%.

Major banks forecast that by the end of 2026, the average level of the S&P 500 index will reach 7,500 points. The most optimistic projection comes from Deutsche Bank, at 8,000 points.

Russel 2000 (RUT)

Weekly performance: -0,86% (weekly close: 2529,42). Year-to-date performance: +12,86%.

VIX

VIX remains in a low-volatility regime, closing the week at 15.18.

The chart illustrates the projected growth in electricity consumption by U.S. data centers over the 2015–2035 period, broken down by regional power systems.

The increase in physical electricity demand from data centers reflects a structural trend rather than a short-term AI-driven narrative.

Key takeaway — demand estimates continue to be revised upward.

• 106 GW — expected installed data center demand capacity in the U.S. by 2035
• 391 TWh — projected annual electricity consumption by data centers by 2030
• +36% — upward revision versus the previous estimate, BloombergNEF (April 2025)

The black dashed line represents the prior BloombergNEF forecast, which is materially lower than the current bars after 2025 and highlights the scale of the upward revision to expectations.

Even under conservative scenarios, the load on power grids, generation capacity, and transmission infrastructure is set to increase significantly.

Historical productivity trends by country:

Labor productivity per hour worked (PPP) is shown for the period from 1990 to 2025:

• United States — sustained and accelerating growth, a clear global leader
• Eurozone and the United Kingdom — positive growth, but materially weaker
• Japan — significantly lagging

The productivity gap between the U.S. and both Europe and Japan is widening rather than narrowing.

Implications of rising productivity:

• Reduced inflationary pressures;
• Support for real GDP growth;
• The economy can expand without overheating.

The U.S. is entering a new productivity growth cycle, reinforcing its global competitive advantage. This provides fundamental support for the U.S. economy and U.S. assets.

Eurozone

The ECB meeting has taken place, at which the regulator left interest rates unchanged and revised its GDP growth forecasts upward for the next two years.

Monetary policy

• The policy rate remains unchanged; inflation is under control;
• Stance: close to neutral;
• The ECB is increasingly shifting its focus away from inflation and toward signs of economic weakness.

Interest Rates:

• Deposit facility rate: 2.0% (prev. 2.0%);
• Marginal lending facility rate: 2.4% (prev. 2.4%) — the rate at which banks can borrow overnight from the central bank;
• Short-term (policy) rate: 2.15% (prev. 2.15%).

Inflation: Consumer Price Index (CPI), November:

• Core CPI (y/y): 2.4% (prev. 2.4%);
• CPI (m/m): −0.3% (prev. 0.2%);
• CPI (y/y): 2.1% (prev. 2.2%).

ECB inflation projections:

• 2025: 2.1%
• 2026: 1.9%
• 2027: 1.8%
• 2028: 2.0%

GDP, Q3 (final):

• q/q: 0.3% (prev. 0.1%);
• y/y: 1.4% (prev. 1.5%).

ECB GDP growth projections:

• 2025 GDP growth: 1.4%
• 2026 GDP growth: 1.2%
• 2027 GDP growth: 1.4%
• 2028 GDP growth: 1.4%

Unemployment rate (October): 6.4% (prev. 6.3%).

Purchasing Managers’ Index (PMI), December:

• Services: 52.6 (prev. 53.6);
• Manufacturing: 49.2 (prev. 49.6);
• S&P Global Composite: 51.9 (prev. 52.8).

Euro Stoxx 600

The Euro Stoxx 600 hit a new all-time high on Friday. Weekly performance: +0.45% (week-end close at 583.3). Year-to-date growth: +15.37%.

China:

The economy is stabilizing on the back of exports, while domestic demand and investment remain weak; policy support remains targeted and cautious.

Monetary policy

• Policy rates remain unchanged;
• Stance: accommodative but targeted;
• China is supporting the economy but has not yet launched a large-scale stimulus.

Interest rates:

• 1Y Loan Prime Rate (medium-term lending): 3.50%;
• 5Y Loan Prime Rate (five-year rate, influencing mortgages): 3.50%.

Inflation Indicators (October):

• Consumer Price Index (CPI, m/m): −0.1% (prev. 0.2%);

• CPI (y/y): 0.7% (prev. 0.2%).

• Producer Price Index (PPI, y/y): −2.2% (prev. -2.1%).

• Unemployment rate (November): 5.1% (prev. 5.1%);

• Industrial production (November, y/y): 4.8% (vs. 4.9%);

• Fixed asset investment (November, y/y): −2.6% (vs. −1.7%);

• Retail sales (November, y/y): 1.3% (vs. 2.9%).

• Imports (December, y/y): 1.9% (vs. 1.0%);

• Exports (December, y/y): 5.9% (vs. −1.1%);

• Trade balance (USD, December): USD 111.68 bn (vs. USD 90.7 bn).

Purchasing Managers’ Indices (PMI), November:

• Manufacturing: 49.2 (prev. 49.0);
• Non-manufacturing: 49.0 (prev. 49.0);
• Composite PMI: 49.5 (prev. 50.1).

CSI 300 Index

Weekly performance: −0.28% (weekly close: 4,568.17); year-to-date performance: +16.21%.

Hang Seng TECH Index HSTECH.HK

Weekly performance: −2.82% (weekly close: 5,479.04); year-to-date performance: +23.49%.

BOND MARKET – almost neutral dynamics

20+ Year U.S. Treasury Bonds (ETF TLT): for the week: +0.24% (weekly close: 87.55). For 2025: −0.28%.

Yields and Spreads

• Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity: 4.17% (vs. 4.18%);
• 2-year Treasury yield: 3.63% (vs. 3.51%);
• ICE BofA BBB U.S. Corporate Index Effective Yield: 5.00% (vs. 5.02%).
• Yield spread between 10-year and 2-year U.S. Treasuries: 68 bps (vs. 67 bps);
• Yield spread between 10-year and 3-month U.S. Treasuries: 54 bps (vs. 54 bps).

The cost of the 5-year U.S. credit default swap (CDS), a measure of default insurance, stands at 26.99 bps (vs. 27.88 bps last week).

GOLD FUTURES (GC)

Weekly performance: +0.90% (weekly close: USD 4,368.07 per troy ounce). Year-to-date gain: +65.42%.

The growth of global debt is pushing gold prices higher. There is a strong correlation between gold prices and the growth of debt servicing costs: since 2022, interest expenses have increased by 40% (+USD 1.7 trillion), while gold prices have risen by 142%.

Latest forecasts from Goldman Sachs:

• Central bank demand remains strong: in October, purchases totaled 49 tonnes versus an average of 17 tonnes prior to 2022; key buyers were Qatar (20 tonnes) and China (15 tonnes), pointing to ongoing hedging of geopolitical risks.
• Gold price target: GS expects gold prices to rise to USD 4,900 by 2026, driven by central bank purchases and Federal Reserve policy easing.

DOLLAR INDEX FUTURES (DX)

Weekly performance: +0.37%; weekly close: 98.38; for 2025: −9.18%.

OIL FUTURES

Weekly performance: - 1.72% (weekly close: $56.54 per barrel). Year-to-date performance: −21.31%.

Oil prices are declining on expectations of a partial loss of the geopolitical risk premium, prospects of a global supply surplus, and weaker macroeconomic data from China.

Cryptocurrencies

In the current environment, cryptocurrencies reflect the state of global liquidity and risk appetite: the market is evolving more institutionally, with no signs of speculative overheating.

BTC FUTURES

Weekly performance: +0.62% (weekly close: USD 88,726). Year-to-date performance: −5.37%.

ETH FUTURES

Weekly performance: -1.88% (weekly close: USD 3,004.7). Year-to-date performance: −10.15%.

Total cryptocurrency market capitalization stands at USD 3.02 trillion (vs. USD 3.06 trillion a week earlier), according to CoinMarketCap.

Crypto market shares:

• Bitcoin: 59.1% (58.6%);
• Ethereum: 12.1% (12.4%);
• Others: 28.8% (29.0%).

Public companies are pursuing Bitcoin treasury strategies. The share of bitcoins held on corporate balance sheets relative to total Bitcoin supply stands at 5.34% (vs. 5.30% last week):

ETF Net Flows Chart: