Gratitude, Guidance, and Year-End Opportunities
November in Arizona is one of the best times of the year. The mornings finally cool off, patios get busy again, and the sunsets seem to last a little longer. It’s also when many of us pause to reflect on what we’re thankful for— family, friends, and for us at Strategic Income Group, the privilege of helping clients live their best lives and steward their wealth with purpose.
Even in a season built around gratitude, the economy keeps moving—and so does the Federal Reserve.
The Fed Cuts – but Cautions
As expected, the Fed reduced its benchmark rate by 25 basis points in early November, bringing the federal funds rate to 3.75% – 4.00%. The surprise came in the guidance: policymakers hinted this could be the final cut of 2025, citing lingering inflation pressures and signs of labor-market strain.
While inflation continues to hover slightly above 3%, job data has started to soften. Several large employers—including Amazon and Target—recently announced workforce reductions tied partly to AI-driven efficiencies and restructuring. Broader employment remains healthy, but the Fed’s slower pace of easing shows its intent to avoid overstimulating the economy while technological shifts reshape the workforce.
Markets initially pulled back on the news but quickly stabilized as investors focused on the Fed’s longer-term plan, which still calls for two additional cuts in 2026—a measured path toward lower borrowing costs.
Balancing Growth, Inflation, and Employment
The Fed’s dual mandate—to promote stable prices and maximum employment—is facing new complexity. AI and automation are boosting productivity but also trimming certain jobs. That dynamic may help contain inflation in the long run but could pressure consumer spending if layoffs expand.
For now, the data supports a “soft-landing” narrative: GDP continues to grow near 2% – 2.5%, inflation is easing gradually, and wage gains remain positive. The Fed’s patience signals confidence that the economy can slow without stalling.
Staying the Course in a Headline-Driven World
In today’s 24-hour news cycle, there’s always something competing for investors’ attention—Fed meetings, AI layoffs, oil prices, election talk, or next quarter’s earnings forecasts. It can feel like driving down the 101 during rush hour: flashing lights, sudden lane changes, and plenty of people convinced they know the fastest route.
But here’s the truth: while the scenery keeps changing, the destination hasn’t.
Your financial plan—built through SIG’s disciplined process—is already designed to handle volatility, economic shifts, and interest-rate changes. It’s not reactive; it’s proactive. Just as a well-planned road trip includes rest stops and detours, your portfolio includes diversified strategies for growth, income, protection, and flexibility.
Every headline may tempt investors to turn the wheel, but history shows that consistency, patience, and process win the long game.
SIG Perspective: Thankful and Intentional
The market’s story this year has been one of contrast—steady growth paired with new efficiencies, optimism balanced by caution. Through it all, our commitment remains the same: helping you optimize your wealth through a clear framework, disciplined process, and purpose-driven planning.
Three Things to Review Before Year-End
- Maximize Tax-Advantaged Contributions Check that you’re on pace to fully fund 401(k), IRA, and HSA accounts before December 31. Leveraging these limits helps reduce taxable income and strengthen long-term savings.
- Explore Federal and State Tax Credits The Earned Income Tax Credit (EITC) continues to offer meaningful benefits for working families, and Arizona taxpayers can also take advantage of Charitable and School Tax Credits—which provide a dollar-for-dollar reduction in state taxes when supporting qualified organizations and schools. These opportunities not only help reduce taxes but also make a direct local impact. For our clients in other states, let us know if we can help you find similar opportunities in your home state.
- Plan Your Cash Flow and Distributions If you’re of RMD age, consider taking your Required Minimum Distribution before markets or custodians get busy in December. Reviewing cash needs now helps align 2026 withdrawals with your income plan.
Looking Ahead
We’ll continue to monitor:
- The Fed’s evolving tone heading into 2026
- Employment data and AI’s impact on productivity and wages
- Sector rotations and opportunities across public and private markets, and
- Year-end consumer-spending trends as the holidays approach.
As Thanksgiving arrives, we’re reminded that gratitude and good planning go hand-in-hand. Thank you for your continued trust. From all of us at Strategic Income Group, we wish you and your family a season filled with gratitude, peace, and purpose.
Compliance Disclosures
This commentary is for informational and educational purposes only and should not be considered investment, tax, or legal advice. The views expressed reflect conditions as of the date noted and may change without notice. Past performance is not indicative of future results.
Strategic Income Group is an SEC-registered investment adviser. Registration does not imply a certain level of skill. For more information, please refer to our Form ADV available at www.adviserinfo.sec.gov.
