Join the Insights from Fidelity Wealth Management℠ team as we look ahead to the new year. We will discuss the many factors influencing today’s economy and how they are shaping the financial markets as we head into 2026. We’ll also talk about how to handle periods of uncertainty, ways to help your portfolio stay on target, and some wealth planning strategies to help you in the year ahead. Specific topics we’ll cover include: - The latest news on Fed policy , inflation, the labor market, and consumer spending ...

Core Viewpoint - The article discusses the potential implications of Trump's influence over the Federal Reserve, particularly regarding interest rate policies and economic conditions in the coming years, highlighting concerns about inflation and the Fed's independence. Group 1: Economic Data and Trends - The U.S. economy showed stronger-than-expected growth in the third quarter, with GDP increasing at an annualized rate of 4.3%, surpassing expectations [6] - Inflation rose to 2.8% from 2.1% in the spring, indicating persistent inflationary pressures above the Fed's 2% target [6][8] - The consumer-price index increased by 2.7% over the past year, with the annualized inflation rate estimated to be back above 3% [8] Group 2: Federal Reserve and Interest Rates - Trump has criticized Fed Chair Powell for not cutting short-term interest rates sufficiently, labeling it as "monetary malpractice" [1][5] - The Fed's short-term interest rates, which influence various borrowing costs, are distinct from long-term rates set by the bond market, which are affected by inflation expectations [11][13] - A cut in short-term rates by the Fed could lead to rising long-term rates if the bond market perceives an overheating economy, as seen in 2024 when the yield on 10-year Treasury bonds rose to 4.19% [14] Group 3: Political Influence and Future Outlook - Trump's term as Fed chair ends in May, and he is expected to nominate a loyalist, potentially increasing his influence over the Fed [2] - Despite Trump's declining political clout, with a minus-15% approval rating, there are concerns about the Fed's independence if more loyalists are appointed [15] - The article suggests that Trump's previous demands for rate cuts were politically motivated, allowing him to blame Powell if the economy faltered, but the current economic performance complicates this narrative [17]

Economic Growth and Unemployment - The decoupling of jobs and growth could impact markets [1] - US growth was 28% in 2023 and 29% in 2024 [2][3] - The unemployment rate rose from 35% to 38% in 2023 and from 38% to 41% in 2024 [3] - A 35% to 4% growth rate with unemployment at 5% by the end of 2026 is a possibility [9] Productivity and Technology - America is becoming more productive [2] - COVID-19 forced increased productivity with fewer people [4][5] - Remote work and getting the right people into the right jobs contributed to productivity [5] - AI's impact on job creation is uncertain, but new jobs may be required for content moderation [10][11] Future Outlook - The exciting part of this is that we are supercharging this productivity story [8] - Deregulation and tax changes from the new administration could enhance productivity [8] - The focus should be on looking ahead rather than dwelling on the past [7]

Bond Market Analysis - Two-year Treasury yields show more aggressive upside holding after data release [1] - Ten-year Treasury yield faces resistance around 419 to 420, a level dating back nearly two weeks [2] - A settlement above 419 on the ten-year yield would represent a three and a half month high [2] Economic Indicators - Dollar Index initially rose upon data release at 8:30 but the general picture remains unchanged [3] - A close below 9814 on the Dollar Index would mark a two and a half month low [3] - The speaker expresses skepticism about reaching a 2% inflation rate [3] - Conflicting inflation reports exist, with some indicating hot inflation and others indicating cool inflation [4] Consumer Sentiment - Consumer confidence data is dismissed due to perceived media and administration influence [5]

Economic Indicators - Finland's unemployment rate has reached a century high [1] - The Finnish economy is trapped in a negative cycle [1]

Young adults aren't confused by the risks they're taking, writes @kylascan. They're just responding to an economy where the usual advice no longer lines up with outcomes. https://t.co/FAN7O0bQdO ...

It's the feel-good time of year. So, on today's stocks in translation, we are breaking down sentiment. And let's be honest, feelings, they are messy.They're hard to quantify. You can ask 10 people how they feel, you'll get 10 vastly different answers. But the way we use it, sentiment is really just a catch-all term for a whole bunch of moods about the economy or markets.From optimism and bullishness to pessimism and bearishness. And for better or worse, all of them have a number attached which helps us trac ...

Trump and Vance are trying to sell their economy, but the numbers are proving hard to spin. The president and vice president recently each made trips to Pennsylvania to convince Americans that prices are down and the economy is up. Everything bad, they argued, was Joe Biden's fault.But right before Vance hit the podium this week, new jobs numbers came up. Unemployment hit a 4-year high in November with the country shedding more than 100,000 jobs in October. Well, Vance had a response to that.>> When you tal ...

Young adults aren't confused by the risks they're taking, writes @kylascan. They're just responding to an economy where the usual advice no longer lines up with outcomes. https://t.co/M5uSL479qD ...

Republican Party Dynamics - Signs indicate a loosening of President Trump's influence within the MAGA base and increasing resistance from Republicans [1] - Some Republicans express dissatisfaction with the heavily redacted and incomplete Jeffrey Epstein files release, despite the Epstein Files Transparency Act signed by Trump [1] - Republican Congressman Thomas Massie criticizes the document release as failing to comply with the law's spirit and letter [2] - House Republicans defied President Trump and Speaker Mike Johnson by forcing a vote on expanding Affordable Care Act subsidies [2] - Republican Congresswoman Marjorie Taylor Green notes the worsening disarray within the Republican party [3] - 13 Republicans voted with Democrats to overturn one of President Trump's executive orders [3] - Some Republicans in Indiana voted against redistricting, signaling the beginning of lame duck season for 2026 campaigns [4] - Younger Republicans are increasingly coming out against President Trump, suggesting a potential reckoning and the glimmers of a post-Trump Republican party [21][22] Economic Sentiment and Political Impact - 37% of Republicans believe the economy is not working well for them, according to an NPR/PBS News Marist poll [11][12] - Concerns exist that President Trump's economic messaging is out of touch with voters' lived experiences [2][5][8] - Voters are experiencing fatigue related to both their financial situations and the constant "chaos and spectacle" associated with President Trump [9] - Tariffs implemented by President Trump are making it difficult for average household item prices to decrease [13] - The cumulative effect of perceived disconnect between President Trump's actions and the economic struggles of Americans is hitting people hard [14] Individual Republican Decisions - Congresswoman Lee Stefonic's decision not to run for governor is attributed to avoiding a prolonged primary and not wanting to defend Donald Trump for another two years in her district [15][16] - Elise Stefanik's actions communicate extreme frustration, potentially due to Trump's influence [28]