The main takeaways from the Federal Reserve’s updated forecasts:
- Economic growth was revised up (1.9% for 2025 and 2.1% for 2026 when adjusted for the effects of the shutdown, per Chair Powell) but still looks low overall given other indicators. - “Somewhat elevated” inflation is persisting, which Chair Powell attributes to tariffs, with upside risk in the short term. - Weakening labor market with an unclear balance between demand and supply side influences. - Expected decoupling of growth from employment. - Relatively upbeat on productivity but not willing to attribute this to any large extent to AI. Side note: Yes it sounds weird that the Fed is cutting rates while upgrading economic growth forecasts. But their target is mainly the weakening job market. Source: El Erian
Powell the Provider.
Today was the 11th time since 1994 that the Federal Reserve cut rates when the S&P 500 was within 1% of a 52-week high. Nine of those cuts have occurred under Powell. Source: Bespoke @bespokeinvest
Fed hawks/doves table latest
Source: from BofA thru ZeroHedge
When the Fed cuts interest rates within 2% of stock market all-time highs, the S&P 500 has gone on to finish higher over the next 12 months 20 out of 20 times (100% hit rate) 🚨🚨🚨
Note however that the market reaction in the 3 to 6 months is mixed Source: Carson, Barchart
This chart destroys every "gold is too expensive" argument
They were buying 20 tonnes when gold was at $3,000. Now they're buying 55 tonnes at $4,000. Source: Katusa Research @KatusaResearch
Federal Reserve expected to begin buying back an all-time high $45 billion of debt each month beginning in January 🤯👀
Source: Barchart
The Fed rate cut odds in December jumps to 95% on Polymarket.
Source: Ash Crypto
Another strong tailwind for the US economy as we head into 2026...
The price of gas at the pump has tumbled to $3.00 - the lowest since May 2021... If you add to this Fed cutting rates (and soon re-launching QE), fiscal stimulus and financial deregulation, that's a lot of stimulus! Source: Zerohedge
