Weekly Economic Report 12.12.25

Policy dominated the week, as key economic data remains scarce. Naturally, the decision by the Federal Reserve to lower interest rates by another quarter point was the focus – with three conflicting dissents and the decision to start buying $40 billion a month in short dated government paper confusing forecasts of its economic effect and future FOMC actions. On the fiscal side, the failure to pass either a Democrat or Republican supported health care bill means a big rise in premiums, or loss of coverage, for some households. Treasury Secretary Bessent reiterated that many taxpayers would see big refunds in early 2023 due to the One Big Beautiful Bill. Moreover, President Trump continues to tease the idea of a $2000 check funded by tariff revenues. Meanwhile, businesses are holding their breath and new orders, as they await the Supreme Court decision on whether current tariffs are legal -- and whether they will be the recipients of refunds. For us, the bottom line is that there is already enough monetary and fiscal stimulus in the pipeline to start 2026 off well.

EU12-12-2025.pdf

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