Bloomberg Surveillance The Start of 2025's Last Fed Meeting, Jamie Dimon is 'Right About Europe'
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Dec 9, 2025 In this discussion, Sarah Hunt, Partner and Chief Market Strategist at Alpine Woods Capital Investors, shares her insights on how the upcoming Fed meeting might act as a market catalyst despite limited data. She highlights the intricate balance between inflation concerns and labor market dynamics, emphasizing that any cuts in rates depend heavily on these factors. Moreover, she warns about credit risks amid tight spreads and evaluates small-cap profitability as key for future market scenarios. Hunt's commentary paints a complex picture of investment strategies for 2026.
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Prepare For A Messaging-Focused Fed Cut
- Do expect the Fed to cut rates and focus on how the move is messaged rather than the mere act of cutting.
- Prepare for language framing the cut as the end of "insurance" easing with a high bar for future cuts.
Fed Leadership Change Could Shift Policy
- A likely leadership change at the Fed could make 2026 materially more dovish than current projections.
- Goldman Sachs expects two cuts in 2026 versus one shown in the dots because a new chair may favor easier policy.
Yield+AI Support Fixed Income Returns
- Fixed income remains attractive because yields are in the 70th percentile of the past decade despite tight spreads.
- A positive growth backdrop driven by AI and healthy corporate earnings supports bond returns in 2026.