Please stay tuned for important disclosure information at the conclusion of this episode.

Hello and welcome to the Morning Filter podcast. I'm Susan Jubinsky with Morning Star.

Every Monday before market open, Morningstar Chief U.S. market strategist Dave Sikara, and I sit down to talk about what investors should have on their radars for the week,

some New Morning Star Research, and a few stock ideas. Now, a few notes before we get started

today. First, on next week's episode of the Morning Filter, we'll be reviewing Dave's stock

picks from 2025, talking about which picks have worked out and which picks haven't worked out,

at least not yet.

So be sure to tune in for that. Also, viewers and listeners have been asking about how they can access

Dave's prior stock market outlooks. And to make that easier, we're now including a link to Dave's

content archive in our show notes. All right, well, good morning, Dave. As expected, the Federal

Reserve cut interest rates by 25 basis points last week. So what stood out to you from the meeting?

Hey, good morning, Susan. I've seen it hailed out in the media now as the cut that saved Christmas.

So, of course, the real question, though, is, you know, are there more rate cuts yet to

come? And if so, when. So if you take a look at the CME Fedwatch tool, shows that the futures market

is currently pricing in a probability of only 26% of a cut at the January meeting. And then if we

look at the March probabilities of a cut to that three and a quarter to three and a half percent range,

looks like it's a bit of a coin flip right now, about a 50 percent probability of a cut by March.

Now when I look at the projections that come out of the Fed, looks to me like they're almost kind of projecting a little bit of a Goldilocks, you know, outlook here.

In fact, I'd say, seems to me they're

a lot more bullish than Morningstar's U.S. economics team. So their 2026 GDP forecast is 2.3%. It's actually

up from 1.8% they're projecting at the September meeting. I know that they said there's a little

bit of an increase in that number just because you had the government shutdown here, which will be, you know, back open again next year in their projections. But that's still a pretty big step up to go to 2.3% from 1.8. Our own projections for 2026 GDP are only 1.7%. Taking a look at inflation, the Fed decreased their

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