Buckle up, its Fed week!
Investors are expecting a rate cut at this meeting, followed by a series of cuts into next year — with an expectation for rates to end up around 3.25% by end of summer 2026. Some data last week may make this a harder decision than investors would like, and markets will be watching Powell’s press conference very closely. If Powell expresses any doubt about the future path of cuts, that will likely push markets around.
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Other than the Federal Reserve meeting, there is not much data on tap. Investors are wrapping up their years and getting their portfolios in position for taxes and quarter-end window dressing. As I have repeatedly discussed, my view is that a recession is brewing out there, though markets seem not to care. I am urging investors to evaluate their portfolio holdings in light of that likelihood.
Chart of the Week
There has been lots of talk about the “white collar recession” brewing as companies introduce AI and have need of fewer human workers. October’s spike in job cut announcements was taken as a sign that this has finally come to pass. However, in context (with COVID layoffs, for example), October’s jump was negligible. It was however, part of a larger trend in 2025 — companies have increased layoffs, and this may be an indication of normal economic slowing ahead of a recession.
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