September 21, 2025
Volume 12, Issue 39
Weekly Recap
The major domestic equity indexes rose to record highs last week, as the Federal Reserve lowered short-term interest rates for the first time in nine months. Small-cap stocks – which can be more sensitive to interest rate movements than larger companies – gained 2.16 percent. The Nasdaq Composite 2.21 percent last week, while the S&P 500 and Dow Jones Industrial Average added 1.22 percent and 1.05 percent, respectively. Trade developments were also in the headlines following a Friday morning call between President Donald Trump and Chinese President Xi Jinping. In a social media post following the call, Mr. Trump announced that they had reached an agreement regarding U.S. ownership of the short-form video platform TikTok and had made progress on several other issues, including further trade negotiations between the countries.
The highlight of last week’s economic calendar was the Fed’s interest rate announcement following the conclusion of its two-day policy meeting on Wednesday. As was widely expected, the central bank announced a 25-basis-point (0.25 percent) cut to its policy rate following the meeting, the first move since December 2024. Newly appointed Fed Governor Stephen Miran was the sole dissenter, instead voting in favor of a larger 50-basis-point (0.5 percent) rate cut. Recent weakness in the labor market appeared to be the driver of the central bank’s decision to lower borrowing costs, with policymakers acknowledging that “job gains have slowed” and that “downside risks to employment have risen” in their post-meeting statement.
With the rate cut coming largely as expected, traders’ attention quickly turned to signals from policymakers around the path forward for interest rates. The Fed’s Summary of Economic Projections indicated that most policymakers expect to lower the central bank’s policy rate by an additional 50 basis points by the end of the year, representing more easing than their last projections made in June. Expectations for rate cuts in 2026 and 2027 also increased. Again, Dr. Miran was the most aggressive, advocating 150-basis-points of easing this year.
In other economic news, the Commerce Department reported that retail sales increased by 0.6 percent month-over-month in August, outpacing estimates for around a 0.2 percent increase and aligning with July’s upwardly revised figure. August’s gain marked the third consecutive month of positive readings.
Elsewhere, several housing market-related data releases surprised to the downside. The Census Bureau reported that housing starts declined by 8.5 percent in August from the prior month, hitting a seasonally adjusted annual rate of 1.31 million versus estimates for around 1.37 million. The National Association of Home Builders also reported that its Housing Market Index – which gauges the overall sentiment of homebuilders – was 32 in September, holding steady from August but falling short of estimates for a modest improvement. Notably, however, sales expectations for the next six months improved, driven by lower mortgage rates and expectations for additional Fed rate cuts. U.S. Treasury securities lost ground last week. The front-end of the yield curve was little changed while yields increased out back. Anticipation of Wednesday’s rate cut announcement from the Fed, as well as post-meeting comments from Fed Chair Jerome Powell that were viewed as somewhat hawkish, seemed to drive the yield curve movement.
Market Monitor
A full listing of market performance data is available here.
DQYDJ.com (“Don’t Quit Your Day Job”) offers helpful investment calculators here, including one that shows total returns for individual stocks. Koyfin.com provides reams of data on individual stocks, including the ability to track total return — and just about anything else — over time.
In the News
On Wednesday, the Federal Reserve’s Open Market Committee announced a cut of 0.25 percentage points to its benchmark interest rate from 4.25 percent-4.50 percent, down to 4.00 percent-4.25 percent, while signaling that it plans to lower rates further throughout the rest of the year. The FOMC’s statement noted higher inflation and rising unemployment as “risks to both sides of its dual mandate” to maintain maximum employment and stable prices, but stated that it judged “downside risks to employment have risen.” Projections from the Fed also indicated that it anticipates making two further quarter-percentage-point cuts by the end of this year. The only dissenting vote on the committee was from Stephen Miran, a recent appointment of President Trump, who advocated for a half-percentage-point cut and 150 basis points of cuts this year.
For more than half a century publicly-traded U.S. corporations have reported earnings at quarterly intervals, but during an early-morning wave of social media posts on Monday, President Trump reignited a long-standing debate over the requirement. Mr. Trump is pushing for a six-month reporting schedule as opposed to the current format. Ending quarterly results in favor of a six-month reporting schedule would “save money, and allow managers to focus on properly running their companies,” Mr. Trump said. Overall, Wall Street doesn’t seem thrilled at the idea.
The IRS and the Treasury Department have issued final regulations on a SECURE 2.0 provision mandating Roth catch-up contributions for high-income participants aged 50 and over. The rules, which will take effect in 2027, allow plan administrators to use prior-year wages from separate employers to determine eligibility and include changes to provisions for correcting compliance failures and implementing deemed Roth elections.
The Senate Monday night confirmed Stephen Miran to the Federal Reserve Board of Governors by a 48-47 vote, with Sen. Lisa Murkowski of Alaska the only Republican to vote no. Dr. Miran, who chairs the White House Council of Economic Advisers, becomes the first White House official simultaneously to serve on the Fed board in 90 years after President Trump nominated him to fill the remaining term of Governor Adriana Kugler, who resigned in August. Dr. Miran said he would take unpaid leave rather than resign from his administration role as he serves until January 2026. A federal appeals court on Monday rejected President Trump’s attempt to fire Federal Reserve Governor Lisa Cook, hours before the central bank’s critical two-day interest rate meeting. Mr. Trump sought to fire Dr. Cook, the first black woman to serve as a Fed governor, on the basis of mortgage fraud allegations, saying she had claimed two homes as primary residences on home loan applications. She has not been charged related to the allegations, has denied wrongdoing, and sued to block her removal from the Fed board. Reuters reported on Saturday that Dr. Cook had listed one of her properties in Atlanta as a “vacation home” rather than a primary residence.
There are two economies in the U.S. right now, and they are moving in different directions. For high earners and many older Americans, the economy looks robust. They are still spending like gangbusters, and their 401(k) accounts and homes have soared in value. They nabbed 3% mortgages when rates were low. Some might worry about AI eventually coming for their jobs, but for now their positions look relatively secure. For many others, momentum has stalled or reversed. The big wage growth experienced by low-income workers during the pandemic has petered out. Those workers are curbing their spending and in some cases are struggling to find jobs. Unemployment for Black Americans and many young people has jumped. Home prices and rents have risen sharply, making housing increasingly unaffordable.
Just how healthy is the economy?
Rising yields in global government bond markets reflect expectations that interest rates will remain higher, rather than concern over brewing fiscal crises, according to BlackRock. The Internal Revenue Service has released final Roth catch-up regulations confirming that beginning next year highly paid employees who wish to make catch-up contributions can only make them to a Roth 401(k) account.
Charts of the Week
I found the following articles to be of note. Some may be of interest only to advisors while others are aimed more broadly. You may hit paywalls below; many can be overcome here.
- 2025 State of the American Investor Study (Fidelity)
- Resurgent International Value (Brian Chingono)
- Mind the Gap 2025 (Morningstar)
- Suze Orman Gets It Wrong on Annuities and Taxes (Michael Finke)
- Wall Street’s Big, Bad Idea for Your 401(k) (Jason Zweig)
This is the best thing I’ve read recently. This is the best thing I saw. The nastiest. The saddest. The smartest. The hardest to read. The most powerful. Touch is enough. Bayesian. QB1. The Top 50. RIP, Robert Redford. Quite the headline. Prediction markets. A better way to measure mountains.
The largest farms are responsible for most of America’s agricultural production. Of the nearly 2 million farms, just 6 percent of them — 105,384 large farms — are responsible for 78 percent of agricultural produce. The remaining 1.8 million farms are responsible for the other 22 percent of the market. In meatpacking, it’s even more consolidated; just four large firms process 81 percent of U.S. cattle and 65 percent of hogs.
“Freedom is a very good horse to ride, but to ride somewhere.”
~ Matthew Arnold
Securities and advisory services are offered through Madison Avenue Securities, LLC, a member of FINRA and SIPC, a registered investment advisor. This report provides general information only and is based upon current public information we consider reliable. Neither the information nor any opinion expressed constitutes an offer or an invitation to make an offer, to buy or sell any securities or other investment or any options, futures, or derivatives related to such securities or investments. It is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation, and the particular needs of any specific person who may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities, other investment, or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities or other investments, if any, may fluctuate and that price or value of such securities and investments may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance. Diversification does not guaranty against loss in declining markets.
