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  • Writer's pictureStephen H Akin

Santa Claus Rally

Commentators often refer to a Santa Claus Rally when the stock market rises in December.

photo of Santa putting gifts under tree
Santa Claus Rally

The Santa Claus Rally is just one of many seasonal indicators. It was first recorded by Yale Hirsch in his Stock Trader's Almanac in 1972. One of his favorite lines was "If Santa Claus should fail to call, bears my come to Broad and Wall".

As interest rates hover near 22 year highs it remains premature for the Fed to declare victory over inflation. However, yesterdays press conference with Chairman Powell revealed that economic projections showed that Fed officials anticipate cuts in the fed funds rate by 0.75 percentage point next year, compared to the1.25 percentage-point drop that markets expect.

Wall Street Bulls then took control and the Santa Claus Rally ensued.

photo of Christmas Bells
Merry Christmas

Some of you may feel as if you have been left behind as "Wall Street romps to new highs".

Even if you enter this season thinking you're just not doing so well, there are a number of steps that you can take before the end of the year that will free up cash for Christmas! Lets take a look...

You will be surprised at what Santa can pull out of the goodie bag!


Federal Reserve issues FOMC statement

Recent indicators suggest that growth of economic activity has slowed from its strong pace in the third quarter. Job gains have moderated since earlier in the year but remain strong, and the unemployment rate has remained low. Inflation has eased over the past year but remains elevated.

The U.S. banking system is sound and resilient. Tighter financial and credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. The extent of these effects remains uncertain. The Committee remains highly attentive to inflation risks.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. The Committee will continue to assess additional information and its implications for monetary policy. In determining the extent of any additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

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