Bank of America's Chris Hyzy: Market Rally Doesn't Need December Fed Rate Cut

This analysis is based on the CNBC video segment [1] published on November 13, 2025, featuring Chris Hyzy, Chief Investment Officer for Merrill and Bank of America Private Bank, discussing Federal Reserve policy and market conditions.

Hyzy’s commentary coincided with significant market volatility on November 13, 2025. Major indices experienced substantial declines, with the S&P 500 closing at 6,741.55 (-1.24%), NASDAQ Composite at 22,860.18 (-1.73%), Dow Jones at 47,523.73 (-1.35%), and Russell 2000 at 2,383.56 (-2.74%) [0]. The broad-based selloff reflected growing uncertainty about Federal Reserve policy, with markets reassessing the probability of a December rate cut [0].

The probability of a December rate cut has shifted dramatically from 95% one month ago to 49.4% as of November 13 afternoon [2]. This shift follows comments from Federal Reserve officials, particularly Boston Fed President Susan Collins, who advocated holding rates steady and expressed concerns about inflation risks [2]. The Federal Reserve faces a complex decision between hawkish concerns about inflation remaining above the 2% target and dovish pressures from a softening labor market [2].

Hyzy’s perspective appears grounded in his identification of “a new profit cycle building, with new leaders emerging in areas such as innovative infrastructure, domestic manufacturing and cybersecurity” [3]. He has previously noted weakness in energy equities due to “a pivot in the overall global energy supply” and emphasizes “diversifying across and within asset classes” while aligning portfolio changes with long-term goals [3].

The market uncertainty affected various sectors differently, with defensive sectors outperforming growth sectors. Worst performers included Utilities (-2.78%), Consumer Cyclical (-2.35%), Real Estate (-1.96%), and Technology (-1.92%), while Consumer Defensive (+0.73%) and Healthcare (+0.42%) showed resilience [0]. This rotation pattern suggests investors were seeking safety amid policy uncertainty.

Hyzy’s view that the market rally doesn’t need a December rate cut represents a contrarian stance at a time when market participants are increasingly uncertain about monetary policy. His perspective contrasts with other market participants, including Evercore ISI which still sees a December cut as “more likely than not” at 55-60% probability [2].

The divergent views within the Federal Reserve suggest higher probability of policy surprises that could significantly impact market volatility [2]. Internal divisions within the FOMC, with regional presidents taking opposing views, create additional uncertainty for market participants [2].

The recent government shutdown has created gaps in economic data, making policy decisions more uncertain [2]. This data reliability risk compounds the challenge of assessing economic conditions and appropriate monetary policy responses.

1. Policy Uncertainty Risk
   : The divergent views within the Federal Reserve suggest higher probability of policy surprises that could significantly impact market volatility [2]

2. Valuation Risk
   : After a strong rally (S&P 500 +19.96% YTD [0]), markets may be vulnerable to corrections if earnings don’t support current multiples

3. Sector Concentration Risk
   : The heavy losses in growth sectors suggest potential rotation risks, particularly in Technology and Consumer Cyclical sectors [0]

4. Data Reliability Risk
   : The government shutdown has created gaps in economic data, making policy decisions more uncertain [2]

Based on Hyzy’s emphasis on long-term diversification and the “new profit cycle,” investors should consider:

• Maintaining balanced portfolios across sectors and asset classes [3]
• Focusing on companies benefiting from infrastructure spending and domestic manufacturing trends [3]
• Considering defensive positioning given policy uncertainty [0]

The market is experiencing heightened volatility as Federal Reserve policy uncertainty increases. Chris Hyzy’s contrarian view that the market rally doesn’t require a December rate cut provides an alternative perspective to the shifting market expectations, which have seen rate cut probabilities drop from 95% to essentially a coin toss [2]. The defensive sector outperformance and growth sector weakness suggest investors are positioning for potential policy uncertainty [0]. Decision-makers should monitor Federal Reserve communications ahead of the December 9-10 meeting, key economic data releases when available, corporate earnings from Q3 2025, and Treasury yield movements that could further impact equity valuations [2].