Good morning.

A few years back, I had an injury … which was quite painful … and a doctor gave me a Tylenol.  Did that result in the pain going away?  Not at all … but at least the agony wasn’t getting worse.

Today’s slight market gain is akin to a Tylenol … following yesterday’s Fed-caused injury … as the ache for many investors still lingers, but … for the moment … does not seem to be getting worse.

The initial Fed announcement was exactly as expected … a quarter-percent rate cut … but then came the comments that in 2025 the Fed sees fewer cuts than many anticipated … and … as a Wall Street Journal editorial sums it up: “The Fed Admits an Inflation Mistake.”

This all makes me wonder just how history will paint the present Fed … as we went from wildly applauded extremely low inflation … to now-ridiculed statements of inflation being “transitory” … to great praise of a soft landing … and now to ridicule once again under the admission that they may have gotten inflation incredibly wrong.  Meanwhile, we (investors and mainstream America) are stuck in the middle not knowing what is going to happen with prices we pay, borrowing rates we will face and even the certainty of future employment.  The only thing I am sure of is the holiday eggnog might need to have a little more spike to it.

Certainly not helping matters is something we hope will be quickly resolved … as a government shutdown has suddenly and shockingly entered the realm of possibilities with an administration not even in office yet seemingly able to already pull enough strings to get many a puppet dancing.

I do read (okay, scan) a lot of stuff each morning and one thing that caught my eye was a BofA Global Research survey result of what fund managers see as the biggest “tail risk” (resulting in outsized losses).  Seemingly, not even in the picture in November or October … the two top concerns (tied) are “inflation causes Fed to hike,” and “global trade war triggers recession.”

It just seems we are heading into 2025 with more worry than we’ve had in quite a while. And, as far as investors are concerned, this is not a comfortable way to end what has been a very good year.

That will wrap it up for me today as I am finishing some mandatory health care stuff.

As we have seen coverage (and non-coverage) highlighted in recent weeks, I included the last article below where prosthetic limbs might not be fully covered … even if your doctor says it is.

Good luck suing the insurance company. No wonder people are angry.

Many will no doubt find the cost (and red tape) impossible …

… leaving some without a leg to stand on.

Have a great day,

Joseph G. Witthohn, CFA

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