Guggenheim CIO: Fed has room to cut rates in December, more in 2026

Economic Outlook - The US economy is experiencing a slowdown but is not in a recession, with growth projected around high 1% and not quite reaching 2% through 2026 [1][2] - Historical long-term trend growth for the US is approximately 2% real GDP, indicating current growth is slightly below this trend [2] Federal Reserve Actions - Anticipation of a 25 basis points rate cut by the Federal Reserve next week, with further cuts expected through 2026 [3][5] - The Fed is moving towards a neutral rate around 3%, allowing room for cuts [5] Fiscal Policy Impact - Fiscal policies are providing tailwinds for the economy, including benefits from a significant bill that stimulates both companies and individuals [3][4] - Tax benefits for individuals are projected to average between $2,000 to $2,500 per person in 2026 [4] Inflation Trends - Inflation is expected to continue decreasing, albeit at a slower rate, with challenges in reaching the Fed's 2% target [6][8] - Rents and housing costs are anticipated to contribute positively to the inflation narrative as they decline [7][8] Market Sentiment - The current dovish stance of the Fed is expected to remain, with a focus on balancing inflation concerns and employment [10][11] - The uncertainty regarding the leadership of the Fed may impact market sentiment and risk in 2026 [9]