The Federal Reserve met on Wednesday and voted to lower interest rates by 0.25%, targeting rates of 3.50% and 3.75%. Inflation has plateaued at 3.0%, while still above the Federal Reserve’s target of 2.0%, it is down from elevated levels. The Federal Reserve expressed concern about the labor market and the rising unemployment rate, but Jerome Powell indicated the Fed is “well positioned to wait and see how the economy evolves.” No indication was made for a pause or cut in January. Fed Interest Rate Decision | CNBC
As the Federal Reserve cuts interest rates, stocks have historically risen in the next twelve months, so long as the U.S. does not enter a recession:
Netflix vs. Paramount: Netflix and Paramount are battling it out over the acquisition of Warner Bros. Discovery. After the Warner Bros. board approved Netflix’s acquisition of $83 billion, Paramount launched a hostile takeover effort worth $108 billion, going directly to shareholders to approve the deal. Some analysts feel that the acquisition is necessary for both companies to fend off challenges from YouTube and generative AI, while others see Warner Bros as a potential anchor to the acquiring firm. A lot of the value of Warner Bros. is in its intellectual property and the films and media it owns, from HBO to superhero franchises. As someone wrapped in nostalgia watching “A Princess Bride” (owned by Disney) just this week and “Planes, Trains, and Automobiles” (owned by Paramount), legacy content and good storytelling have value: Is Warner Bros. Discovery A “Must Have” Or A “Nice To Have?” | Fortune.
Time vs Money Spent: Some companies are finding that Americans are willing to pay up for appliances and services in an effort to save time: How to Save Time? Americans Buy Premium Appliances to Avoid Chores - Bloomberg. One example is a washer-dryer combo that removes the chore of transferring wet laundry into a dryer. On average, people dread the task, and they put it off for an average of 90 minutes (statistics like this may be why appliances want to hook up to my WIFI, while I thought it was for my convenience 😊). The combination machine costs 66% more than the typical washer-dryer separately, but consumers are pushing for the single unit. Shoppers are also paying more for delivery services like Wal-Mart+, which was able to charge 40% more by offering to deliver and put away groceries, where consumers want them.
Get Those Required Minimum Distributions Done: At age 73, the IRS requires investors to take a required minimum distribution (RMD) from their pretax retirement accounts or be subject to a 25% penalty. The rule also changed for inherited pretax IRAs in 2025, where if the original account owner was subject to RMDs, the heir would be too. Prior to 2025, the penalty was waived for inherited pretax IRAs. As of November 30th, 53% of Fidelity investors who need to take a 2025 RMD have yet to take one. The RMD Deadline is Coming | CNBC
Financial Planning/Investments Corner:
The active vs. passive (i.e. index fund) investment debate has largely been won by passive investors, where passive funds have outperformed active investment managers, particularly in equity sectors. Where active still shines is in fixed income markets Morningstar’s Guide to Active Fixed-Income Investing | Morningstar. Many U.S. core bond fund managers benchmark their fund versus the Bloomberg U.S. Aggregate Bond Index. The index was created in 1973, and it is now primarily composed of U.S. Treasuries (~40-50%), Mortgages (~25%), and investment-grade corporate bonds (25%). Some say the index was created just to be beaten, as the index excludes certain parts of the bond market, like high yield, and leans towards high-quality, government securities. This allows active managers to enhance returns by researching other securities outside of the index that may pay more in interest or be mispriced. The bond market is complex, with debt containing different maturities, interest rates, and covenants that require them to be analyzed. There are periods of time where high-quality bonds benefit investors, typically in recessions where investors flock to safe havens like government debt, but over long-term periods, active fixed income managers outperform passive. Here at RSWA, we monitor how active management can be utilized in a portfolio vs. passive to determine the best approach. Bloomberg Aggregate Bond Index: Definition and Who Tracks It
Quick Hits:
- The Farnsworth Museum in Rockland has 26 new paintings by Andrew Wyeth, through April 19th, 2026: See the Secret Spots that Inspired Andrew Wyeth | centralmaine.com Along the Goose River: Andrew Wyeth’s Secret Subject | Farnsworth Art Museum
- The Louvre has had some significant issues lately: Water Leak in Louvre Damages Hundreds of Books | CNN
- Along with the rest of Europe: Europe Has a ‘Real Problem’ Says JPMorgan CEO Jamie Dimon | YouTube
- Historically Europe has had issues too: A Volcanic Eruption in 1345 May Have Triggered a Chain of Events That Brought the Black Death to Europe
- Europe isn’t all bad, though: Seven countries, one winner: The best Christmas market in Europe
Maine Trails Program: The Maine Trails Program released its first year of grants, as part of a 2024 voter-approved grant program to award $30 million over four years ($7.5 million a year). This year's program saw $16 million in grant requests, with only $7.5 million awarded. I have volunteered on a Monmouth Trails Committee for the past 18 months, which meets biweekly to identify and develop potential multi-use trails in town. We were awarded our full request, over $200k, in the initial bond program to develop a new trail. We accomplished this while limiting the impact to local taxpayers by using Tax Increment Financing (TIF) funds for the required match and in-kind contributions from community partners. This was incredibly important as Monmouth went through a real estate revaluation this year. It has been an interesting experience learning about municipal budgets and the joys of bureaucracy. Maine Trail Program Flooded with Applicants | Maine Public
Quote: “There is one crucial rule that must be followed in all creative meetings. Never speak first. At least at the start, your job is to shut up.” – William Goldman
“Nobody knows anything...... Not one person in the entire motion picture field knows for a certainty what's going to work. Every time out it's a guess and, if you're lucky, an educated one.” – William Goldman
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