This is the ‘BIG WILDCARD' holding Fed Reserve back, says investment strategist

Market Overview - The current market is experiencing all-time highs with significant activity in the IPO market and potential for a Federal Reserve rate cut cycle, although this is not guaranteed [1][3]. - The chief investment strategist at Northern Trust Asset Management expresses a mix of excitement and caution regarding the market's performance, particularly with record levels in major indices like the Dow, NASDAQ, S&P, and Russell [2]. Economic Drivers - Key factors driving the market include the Federal Reserve's movement towards a rate-cutting cycle, although it is not confirmed to be sequential [3][4]. - Anticipated fiscal stimulus is expected to enter the system in early 2026, which is seen as supportive for the market [4]. - Earnings estimates for the S&P 500 and small-cap companies are projected to improve, indicating a broadening participation across corporate America [5][6]. Federal Reserve Insights - Recent Federal Reserve meetings show a shift towards stability with only one dissenting vote, suggesting a more unified stance among voting members [8]. - The balance of risks has shifted towards the labor market, which has softened, but the U.S. economy is not expected to enter a recession [9][10]. - Inflation remains a significant concern, with expectations of rising inflationary pressures into early 2026 due to tariffs affecting the consumer price index [11].