After Tariff Anxiety in October, Will November Continue the Rally?
In both September and October, the S&P 500 saw some minor drops, but when the dust settled, it wasn’t a particularly scary time (source).
Fed Cuts Rates Again Amid Shutdown Delays
The Federal Reserve met on October 28–29 and decided to cut interest rates by another 0.25%. Their decision-making process was complicated by the recent U.S. government shutdown.
The September jobs report, originally scheduled for release on October 3, 2025, was delayed due to the shutdown. Federal Reserve Chair Jerome Powell said the Fed is monitoring job layoffs “very, very carefully,” adding that a December rate cut at their upcoming December 10 meeting is “not a foregone conclusion.”
Inflation Data Offers Clarity, Employment Numbers Lag Behind
On October 24, the Consumer Price Index (CPI) report showed inflation rising 3.0% annually—slightly lower than projections.
The Federal Reserve’s dual mandate focuses on Maximum Employment and Stable Prices. While the Fed has current inflation data, it’s missing the latest employment figures due to the delayed jobs report.
Finding the Neutral Rate: What “R-Star” Means for Investors
The Fed has stated that its goal is to neither stimulate nor restrict the economy, but to remain neutral. This “neutral rate,” often referred to as R-Star, isn’t known exactly but is estimated by the Cleveland Fed to be about 3.7%.
With the current target range of 3.75–4.0%, one additional 0.25% rate cut could bring policy closer to that neutral level.
What It Could Mean for the Market
Generally speaking, in our opinion, the stock market tends to respond positively to rate cuts since lower borrowing costs can help stimulate housing and business investment.
Our current outlook is that the Fed will cut rates one more time this year and that the market rally will likely continue overall—despite short-term volatility—through year-end.
Time for a Portfolio Review?
There’s a lot happening in the world, and this is a great time to touch base. If we haven’t spoken recently and you’d like to review your portfolio—or if you’ve had any changes in your family, finances, employer, or risk tolerance—please schedule a review meeting with our team.
We would love to meet with you over the phone, Zoom, or face-to-face to strategize.
If you’d like to learn more about working with a financial advisors, we invite you to reach out anytime.
Sincerely,
with contributions from Robert Wink, James Wink, Zachary Bachner, James Baldwin, and Daniel Ladzinski
Additional Client Updates
IRA to Roth IRA Conversion Time: If you’re interested in an IRA to Roth IRA conversion, please let us know right away since these take some time to complete.
Tax Time: There are new rules regarding the release of personal information. After January 1, we typically receive many requests from clients to send 1099s and other tax documents for both individuals and spouses. This year, we cannot answer tax questions or provide tax documents generated from your spouse’s account without a signed information release form. If you’d like to start this process early to help prevent delays during tax season, please contact us at (586) 226-2100.
Sources
CNBC – Fed Meeting Live Updates
Bureau of Labor Statistics – CPI Release
Federal Reserve – The Dual Mandate
Cleveland Fed – Neutral Interest Rates
Notes & Disclaimer: Investment advisory services are offered through Summit Financial Consulting LLC, an SEC registered investment advisory firm. Summit Financial Consulting Investment Advisory Firm Representatives do not render tax, legal, or accounting advice. Life/Annuity Insurance products and services offered by the individual insurance agent. Health insurance is offered through Summit Health Services, LLC and Property/Casualty (P&C) Insurance is offered through Summit Insurance Services, LLC and our local P&C agency partners. Please update Summit Financial Consulting LLC, if your investment objectives have changed or if the personal or financial information previously provided has changed. Past performance is no guarantee of future results. Representatives of Summit Financial Consulting LLC offer tax preparation services through Summit Tax Services. Summit Tax Services is a DBA of Heemer Klein & Company and they are owned and operated independently.