Market Reaction and Economic Outlook - Equity markets have shown relative stability, with interest rates on the curve from 2-year to 30-year increasing by 1 to 3 basis points, influenced by the Fed rate press conference [1] - There is an expectation of better growth in 2026 alongside anticipated Fed interest rate cuts, which may lead to stable wage inflation and high profit margins for companies [3][4] - The current policy uncertainty is seen as beneficial for equities, as lower interest rates increase the present value of future cash flows, supporting valuations [4] Asset Management Perspective - The Kansas City Fed president's stance against immediate rate cuts indicates potential pushback against the strong market performance, suggesting a slower pace of Fed easing next year [6] - Investors are advised to rebalance their portfolios, considering the strong gains in equity markets over the past years [7] Inflation and Stagflation Concerns - There are indications of a "stagflation light" scenario, with moderated job gains and rising inflation, although the unemployment rate remains stable [9][10] - The Fed may face challenges in managing inflation as it approaches 2026, with the potential for inflation to become a more significant issue [11]