Norfolk backs post office during season of giving
Postal Clerk Kathy Bascetta, left, and her daughter, Postal Clerk Jenna Brown, work at Norfolk Post Office.
Jennifer Almquist
Norfolk Postmaster Michelle C. VeronesiJennifer Almquist
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Faced with the choice, the Fed considers unemployment a greater threat to the economy than higher inflation. It is why they lowered interest rates again by one quarter point to close out the year.
Stocks rallied on the news on Wednesday afternoon but fell back on Thursday and Friday. At least the major averages did, but what went on under the hood spoke volumes about how investors are interpreting the news.
Commodity stocks of all kinds were up and outperforming, as were precious metals. Silver was the standout this week, outpacing gold, platinum, and palladium. The equal-weighted S&P 500, which allocates the same weight to each stock in the index, outperformed the benchmark index.
Why is that significant? A mere handful of stocks (around 10 overall), which represent 40% of the benchmark, have consistently beaten the remaining 490 stocks in performance for several years.
Why would the Fed’s interest rate decision create this kind of dispersion? The central bank not only cut rates but also promised to begin buying $40 billion worth of short-term Treasury bills starting today, Friday, Dec. 12. Their buying spree is open-ended, but many believe it could taper off by April. I have my doubts.
Investors were also surprised by several other comments by Fed Chair Jerome Powell. In the Q&A session after the FOMC meeting, Powell mentioned that the policy board expected the economy to accelerate next year to above 2%, which was higher than most investors had expected. Powell also said that while inflation was still not at the Fed’s 2% target, the effect of tariffs would be a one-off price jolt and not the beginning of a spike in inflation rates.
As for the employment picture, he thought it might be faltering a bit. He revealed that the data in every monthly non-farm payroll report was 60,000 per month too high, due to how the data is collected and processed. As such, labor gains are often overstated. In summary, Powell believes the fed funds rate is now at a level where monetary policy is in equilibrium, neither too tight nor too loose.
Investors could not help but conclude from his comments that the Fed seems willing to run the economy “hot” in 2026. A faster-than-expected growth rate in the economy, moderate inflation, and an injection of $40 billions of additional liquidity into the financial system is a recipe for investing in ‘real economy’ stocks.
Consumer discretionary, financials, industrials, small-cap, and cyclical stocks suddenly began to outperform. These are stocks with attractive valuations, reasonable growth, and that should stand to benefit from Fed policies in the overall economy. Traders began to rotate out of the narrow, more focused speculative “AI” momentum stocks that have outperformed everything else in the last 18 months.
The problem with that scenario is that technology stocks, in general, and Mag 7/AI Five in particular, comprise such a large share of the main equity averages that selling them cannot help but sink the entire market. Friday’s sell-off was an example of the impact of this rotation. However, stocks have been climbing nonstop for the last several days, so this bout of profit-taking was overdue.
For me, the Fed’s move to shore up the credit markets by buying $40 billion in short-term bills and treasury notes is the first shot across the bow of what I believe will be the monetization of the nation’s debt. Short-term government debt accounts for two-thirds of all sovereign debt outstanding.
Both Treasury Secretaries Janet Yellen and Scott Bessent have steered clear of auctioning off long-term debt securities to cover our burgeoning debt costs. They knew that doing so would force yields on the ten- and twenty-year bonds to rise much higher. Instead, they have used short-term treasury notes and bills in the auctions.
Enter the U.S. central bank. Does anyone else see this circle forming? The U.S. central bank (which prints money) is now buying $40 billion of U.S. short-term debt each month as the U.S. Treasury sells it to a shrinking market. This is not quantitative easing. This is the U.S. government buying back the securities it sold to cover our debt obligations by printing money.
I know most will disagree with my premise. After all, this is early days, and we won’t truly know for sure until the spring, when supposedly these Fed purchases will no longer be needed. In the meantime, I will be listening for moves of this sort out of the government.
Readers should also prepare for the Supreme Court decision, expected in the next week or so, on the Trump tariff question. The way they address the legality of these tariffs will likely affect markets. I expect stocks to fluctuate for the next week or two. This pullback in the process has a little more to run, but then we should bounce back and test, if not exceed, highs.
Bill Schmick is a founding partner of Onota Partners, Inc., in the Berkshires.Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners, Inc. (OPI).
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Sharon Town Hall is located on Main Street.
Leila Hawken
SHARON — A town meeting is set to be held at 4:30 p.m. on Thursday, Dec. 18, to authorize First Selectman Casey Flanagan to formally accept the $1 million in funds the town received in the 2025 round of Small Town Economic Assistance Program, commonly known as STEAP grants.
The funds, matched by $700,000 from the town, are dedicated towards the repair of River Road, which has been limited to single-lane travel since the structural failure of the roadway in the summer of 2023.
Sharon’s award of $1 million was the maximum amount allocated to any one town in the program.
Thursday’s vote is to allow Flanagan to sign the agreement for the grant, and does not involve the additional movement of funds.
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Provided
The little ones attending the mom’s group at Sharon Hospital were surprised by a special visit from Mrs. Claus last week. The children received a few special gifts and treats from the North Pole. Mothers interested in joining the group at Sharon Hospital can contact Candy Osborn at candy.osborn@nuvancehealth.org
KENT — The Planning and Zoning Commission took several actions Thursday, Dec. 11, approving new cannabis regulations, updating parking provisions related to affordable housing and electing new officers.
Cannabis regulation
The commission voted unanimously to adopt a new section of its regulations governing cannabis establishments.
Recreational retail cannabis establishments remain prohibited townwide under an ordinance approved by voters in the Nov. 4 election. The newly adopted regulations establish parameters for other cannabis-related uses — including cultivation and production facilities — which would be subject to special permit approval.
Under the regulation, all cannabis establishments are prohibited in residential zones, with one exception: cultivation may be permitted in the Rural Residential 1 zone. The regulation is set to take effect Jan. 1.
Affordable Housing regulation fix
The Commission voted to remove two stipulations on parking in its affordable housing Section 6400.
Land Use Administrator Tai Kern explained that the section was out of date, as it was meant to be removed when P&Z revised its parking regulations in Section 8200. The removal was intended to remedy conflicts between the outdated regulation and the newer parking code, which had caused issues in a recent application.
New officers
Following the departure of longtime chair Wes Wyrick in November, the Commission rearranged its officer suite during the Dec. 11 meeting.
Karen Casey was elected as the new chair. She was previously vice chair.
Sarah Chase was elected as vice chair. Donna Hayes was elected as secretary.
“I’m honored,” said Casey after she was voted into the leadership role, “especially to have Sarah standing right behind me.”
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