Fed shakeup LOOMS as markets rocket toward historic highs

Market Overview - The final trading week of 2025 shows the Dow slightly higher by five points, while the S&P and NASDAQ are slightly lower, with the S&P 500 nearing the 7,000 level and tracking an eighth straight monthly gain [1] - All three major indices have posted double-digit gains for the year, with the Nasdaq surging over 22%, the Dow up 15%, and the S&P 500 jumping 18% [2] Economic Growth and Federal Reserve Outlook - Strong GDP growth is noted, with inflation decreasing and tariff-related inflation not materializing, indicating potential for real economic growth [3] - The Federal Reserve is expected to face an intellectual battle regarding interest rate policy, with a need to balance inflation and unemployment while supporting private sector growth [3][4] - The consensus suggests no further rate cuts until April, with a new Fed chair likely to influence future decisions [2][4] Structural Issues and Inflation - Current inflation issues are described as structural rather than demand-driven, particularly in sectors like housing, healthcare, and energy [5][6] - Reforms in energy and healthcare are expected to help manage inflation while maintaining strong economic growth [6] Metals Market - Gold has seen a 70% increase this year, with record highs reached, as investors seek safe havens [7] - The current price of gold is noted to significantly exceed its book value, with U.S. gold holdings valued at approximately $1.2 trillion compared to a book value of $11 billion [11] - The U.S. holds a dominant position in gold reserves, which is seen as a strength in global economic power [10][12]