Investments: Fed Front & Center Again
Once again, the Federal Reserve and Chairman Jerome Powell sit center stage this holiday season as investors weigh the prospect of a rate cut at the December 9–10 FOMC meeting. Unlike the last two meetings, a cut is not guaranteed.
Market expectations have swung sharply, moving from nearly 100% confidence immediately after the previous meeting, down to roughly 35% two weeks ago, and now back up to around 70%. With a divided board of governors, limited economic data, rising unemployment, and inflation still above the Fed’s target, any decision is likely to face pushback.
As for whether anyone can say with certainty what the Fed will do, Bob Doll put it best in his weekly insight “Doll’s Deliberations”: “No one knows.” Ultimately, the best approach for investors is to remain diversified and focused on the long term rather than reacting to short-term volatility, remembering that “in the short run the market is a voting machine but in the long run the market is a weighing machine,” as Warren Buffett famously put it.
Planning: Inherited IRA RMDs
Inherited traditional IRAs continue to create confusion among beneficiaries, especially following both SECURE Acts. Understanding the rules is important for effective planning.
Receiving spouses retain more flexibility, as they can treat the account as their own. However, non-spouse beneficiaries must fully distribute the IRA within ten years if the deceased account owner had already begun taking RMDs. In many cases, the IRS also requires an RMD to be taken each year during that ten-year period.
To prevent unnecessary tax liabilities, spreading withdrawals over several years rather than waiting to take large distributions near the end of the timeline can help smooth out taxable income and preserve more of your wealth.
