This Weekly Financial Markets Update reviews the top market headlines: Fed Enacts Third Rate Cut of 2025, Global Government Bond Yields Hit a 16-Year High, Oil Prices Extend Decline
  • The Federal Reserve cut the federal funds rate target range to 3.5% — 3.75%
  • The 30-year U.S. Treasury bond yielded 4.85% at the end of last week
  • The U.S. national average for a gallon of gas was $2.92 last week

Top Three Market Headlines

Fed Enacts Third Rate Cut of 2025: In a highly anticipated move, the Federal Reserve last week once again reduced its policy interest rate, the federal funds rate, by a quarter-percentage point. This was the third cut of this magnitude since late September and put the target range at 3.50% - 3.75%. As with the central bank's previous reduction in November, Fed Chair Jerome Powell supported the move by pointing to rising downside risks to employment. Members of the Fed's rate-setting committee also updated their guidance for future rates, reaffirming expectations for one additional quarter-point cut in 2026.

Global Government Bond Yields Hit a 16-Year High: Yields on long-dated global government bonds have been on the rise in 2026, with the yield on the Bloomberg Global 10-Year+ Total Return Index recently reaching its highest level since 2009. The moves come investors expect that key central banks, particularly outside of the U.S., are near the end of their latest rate-cutting cycles. Long-term bond yields on German and Japanese sovereign debt, in particular, have jumped this year on concerns about rising levels of debt issuance. In the U.S., the 30-year Treasury bond yield has risen from 4.61% at the start of the year to 4.85% last week, even as short- and intermediate-term Treasury bond yields have fallen.

Oil Prices Extend Decline: Oil prices tumbled last week, extending the commodity's recent downward slide. Front-month futures contracts for West Texas Intermediate crude oil, the U.S. market benchmark, ended at $57.44 per barrel, down 4.4% on the week and off more than 20% from a price of $73.84 on June 20th. Weighing on prices has been a combination of weak demand and oversupply, the latter keyed by moves by OPEC+ to wind down voluntary production cuts. One benefit of the trend, however, is lower gas prices for drivers in the U.S.; according to AAA, the national average for a gallon of regular grade gas was $2.92 at the end of the week, down from $3.02 one year prior.

As of December 12, 2025 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -0.16% 2.66% 21.59% 17.86%
S&P 500 -0.61% 2.33% 17.51% 14.29%
Russell 2000 1.21% 4.95% 15.85% 9.55%
MSCI EAFE 0.85% 3.46% 29.47% 25.30%
MSCI Emerging Markets 0.43% 3.57% 32.09% 27.74%
FTSE NAREIT Equity -0.83% -1.68% 2.75% -1.02%
Bloomberg Commodity -2.63% 4.97% 14.81% 14.74%
Bloomberg U.S. Aggregate -0.20% 0.56% 6.73% 5.57%

The Federal Reserve 12/10/2025, Bloomberg 12/9/2025, Oilprice.com 12/12/2025, AAA 12/14/2025, FacttSet. Data from Morningstar Direct. Returns for periods greater than one year are annualized. Investment advisory services are offered by Gallagher Fiduciary Advisors, LLC ("GFA"), an SEC registered investment advisor that provides retirement, investment advisory, discretionary and independent fiduciary services. Registration as an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the SEC. GFA is a limited liability company with Gallagher Benefit Services, Inc. as its single member. GFA may pay referral fees or other remuneration to employees of Arthur J. Gallagher & Co. or its affiliates or to independent contractors; such payments do not change our fee. Neither Arthur J. Gallagher & Co., GFA, their affiliates nor representatives provide accounting, legal or tax advice. GFA does not express an investment opinion regarding any specific commodity, sector or individual security. Unless otherwise expressly noted, the contents of this communication do not constitute securities or investment advice, nor should this communication be construed as an opinion regarding the appropriateness of any investment. The information provided cannot take into account all the various factors that may affect your particular situation, therefore you should consult your GFA consultant before acting upon any information or recommendation contained herein to discuss the suitability of the information/recommendation for your specific situation.