Josh Gilbert, Lead Analyst APAC and Middle East
Dubai, United Arab Emirates – October, 2025
The Fed looks set to sit on its hands this week, but it’s likely to come with a hawkish tone, with markets pricing in close to an 80% chance of another hike in December. Unless Chair Kevin Warsh pushes back hard, investors should treat a hike before year-end as the base case, said Josh Gilbert, etoro Lead Analyst APAC and Middle East.
September’s jobs report gave the Fed some breathing room, with just 29,000 jobs added and wage growth slowing. But inflation is still running at 3.7%, and with oil keeping business costs high, we’re unlikely to hear Warsh sound relaxed about it.
Markets will be most focused on how far this tightening cycle runs into next year, with futures already pricing more than two further hikes by the end of 2027. If the Fed signals more than that, it could push bond yields higher again, making future company profits worth less today and putting pressure on share valuations. That matters even more for the cloud giants, who are increasingly borrowing to pay for their data centre build-out, with Amazon alone selling USD$25 billion of bonds in July, so higher rates mean that spending costs more to fund. A hold on its own is unlikely to give markets much relief.
For investors in the Gulf, the Fed’s decision matters closer to home too, as central banks with currencies pegged to the dollar typically follow its lead, so a December hike would likely flow through to local borrowing costs. After a rough month for chip stocks, a hawkish Fed would add to the pressure on riskier assets, and Warsh’s tone will likely set the mood for markets right through to year-end.
About etoro:
etoro is the platform where you can trade, invest, save and spend. Founded in 2007 with the vision of a world where everyone can trade and invest in a simple and transparent way, we’ve built a regulated, Nasdaq-listed platform used by millions of people in 75 countries. We believe there is power in shared knowledge. By combining the collective intelligence of our community with AI-powered tools, we’ve created a collaborative investment community designed to help you grow your knowledge and wealth. On etoro, you can hold a range of traditional and innovative assets and choose how you invest: trade directly, invest in a portfolio, copy other investors, or invest with an AI agent. You can visit our media centre here for our latest news.
Disclaimers:
Not investment advice. etoro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.
Middle East:
etoro (ME) Limited, is licensed and regulated by the Abu Dhabi Global Market (“ADGM”)’s Financial Services Regulatory Authority (“FSRA“) as an Authorised Person to conduct the Regulated Activities of (a) Dealing in Investments as Principal (Matched), (b) Arranging Deals in Investments, (c) Providing Custody, (d) Arranging Custody and (e) Managing Assets (under Financial Services Permission Number 220073) under the Financial Services and Market Regulations 2015 (“FSMR”). Registered Office and its principal place of business: Office 26 and 27, 25th floor, Al Sila Tower, ADGM Square, Al Maryah Island, Abu Dhabi, United Arab Emirates.
