This week, the Fed lowered interest rates by 25bps…and boy, did the stock market throw a tantrum! It wasn’t the cut itself that irritated the market, but rather the message from the Fed that there would only be two cuts in 2025, instead of four.
Inflation is tough to tame in a large economy like ours, and it takes longer than expected. Our friends at Strategas updated their “Common Man CPI” and compared it with the change-in-wages over time. As you can see from the chart below, sticky inflation is indeed challenging, but no more so than maintaining purchasing power as reflected by real wages.
On the bright side, small business optimism experienced its largest month-over-month increase in over 30+ years. So, it’s not all bad news on the economic front, as reflected in the chart below:
In our experience, becoming overly euphoric or overly pessimistic does not help in making prudent financial decisions. We have just enjoyed two good years of stock market returns, and the previous correction ended about 15 months ago. Next year may be a wilder ride than this year, but we won’t be surprised. Sticking to our longer-term financial plan, taking appropriate risk, and planning for short term liquidity needs, continue to be our priorities going into 2025.
From our team to your family: Happy Holidays, Happy Hanukkah, Merry Christmas, and Blessings to You and Yours! As always, thank you for your trust and confidence. Until next time, Take Care.
Tom, Kelly, Alex, Amanda, Jesus, Larry, & Rachael
Year End Modified Office Hours
In observance of the upcoming market holidays, we will have the following modified hours:
- Tuesday, December 24th: The Market and Office will close at 12:00 PM.
- Wednesday,December 25th: The Market and Office closed.
- Tuesday, December 31st: The Market and Office will close 3:00 PM.
- Wednesday, January 1st: The Market and Office closed.