Group 1: Federal Reserve Actions - The Federal Reserve lowered interest rates by a quarter percentage point on December 10, 2025, marking its third cut of the year, bringing the benchmark federal funds rate to a range of 3.5% to 3.75% [1] - The decision revealed significant internal disagreement among policymakers, with some advocating for unchanged rates and others pushing for a larger cut, marking the first time since 2019 that such dissent occurred [3] - Fed Chair Jerome Powell described the current economic situation as "challenging," highlighting concerns about a softer labor market and inflation remaining above the 2% target [4] Group 2: Economic Outlook - The Fed's outlook for 2026 indicates limited easing ahead, projecting just one rate cut next year, with the Fed Funds rate expected to be 3.4% [5] - Real GDP growth projections have been increased for 2026 to 2.3%, with further increases for 2027 and 2028, while the unemployment rate is projected to decline slightly in 2027 [6] Group 3: Investment Opportunities - The Avantis U.S. Small Cap Value ETF (AVUV) is highlighted as a potential investment, benefiting from improved GDP growth projections and a less dovish interest rate policy [8] - The Invesco S&P Mid-Cap 400 Pure Value ETF (RFV) is positioned well due to high momentum in mid-cap stocks, easing trade tensions, and normalizing Fed rate policy [9] - The State Street SPDR S&P Bank ETF (KBE) is noted for its favorable conditions, including cheaper valuations and solid earnings growth, despite a softer labor market [10] - The Pacer US Cash Cows 100 ETF (COWZ) focuses on companies with high free cash flow yields, which are better positioned in a tighter credit market [11]