Today is Tuesday, Dec. 23, the 357th day of 2025. There are eight days left in the year. Today in history: On Dec. 23, 1972, in an NFL playoff game between the Pittsburgh Steelers and the Oakland Raiders, Steelers running back Franco Harris scored a game-winning touchdown on a deflected pass with less than 10 seconds left. The Immaculate Reception, as the catch came to be known, is often cited as the greatest NFL play of all time.
The Vanguard Real Estate Index Fund ETF Shares (NYSEARCA:VNQ) has struggled badly. Over the past five years, the fund gained just 2.6% while the S&P 500 surged 85%, a gap wide enough to make investors question whether real estate deserves a place in their portfolios. The culprit: the Federal Reserve's aggressive rate hiking campaign beginning in March 2022 sent REITs into a prolonged downturn.
From the U.S. side, recent economic data indicate that the economy is gradually cooling: inflation continues to ease (2.7%), wage growth is slowing, and the unemployment rate has risen to its highest level in several years (4.6%). These signals reinforce expectations that the Fed is moving closer to a monetary easing cycle in 2026. However, in the near term, the Fed continues to maintain a cautious stance, emphasizing that policy decisions will remain highly data-dependent.
Markets continue to price roughly a 75% probability that the Fed will keep rates unchanged at its January meeting. Attention now turns to Thursday's inflation data, which is expected to show broadly stable price pressures. An upside surprise could further support the dollar and yields, while any deceleration would likely revive expectations for earlier or deeper easing, weighing on both.
Investors initially reacted positively, lifting the Dow Jones Industrial Average and the small-cap Russell 2000 Index, which tends to benefit most from lower borrowing costs. However, by the end of the week, the S&P 500 gave back earlier gains, and the Nasdaq Composite declined as concerns resurfaced around stretched technology valuations and the sustainability of heavy investment in artificial intelligence.
For almost an entire year, Donald Trump has begged the Federal Reserve to slash interest rates and supercharge the American economy. And for almost an entire year, Fed Chair Jerome Powell has barely budged. Now, as the president prepares to appoint Powell's successor, amenability seems to be top of mind. "I don't think he should do exactly what we say," Trump told The Wall Street Journal today of the future chair. But "I'm a smart voice and should be listened to."
The presidents' five-year terms were due to end in February, and prior reappointments have typically come closer to expiration dates as they historically have been routine affairs. But recent suggestions from the Trump administration that new conditions ought to be placed on the presidents raised concerns it was seeking a wider leadership shakeup. Earlier this month, Treasury Secretary Scott Bessent floated a three-year residency requirement for Fed presidents. Days later, National Economic Council Director Kevin Hassett, who is the frontrunner to become the next Fed chair, endorsed the idea.
The Federal Reserve, as expected, cut rates again and indicated that another cut could come in 2026. Oracle Corp. ( NASDAQ: ORCL), which has been on fire this year, was hammered after the company missed earnings expectations and told Wall Street it has implemented a substantial jump in spending on AI data centers, which many investors feel is taking too long to translate into profit.
