The Fed cut rates by a quarter point today, but jolted markets by signaling less rate-cutting on the horizon in 2025 than envisioned three months ago.

Why it matters: The Fed is entering a more cautious phase after cutting rates for three straight meetings, reflecting sluggish progress in bringing inflation down.

Market impact: Stocks plummeted, and bond yields jumped.

• The S&P 500 closed down almost 3%, falling first after the rate announcement and then further during Fed chair Jerome Powell's press conference. The Dow Jones Industrial Average fell 2.6% for its 10th straight decline, the worst streak since late 1974.
• The tech-heavy Nasdaq closed down 3.6%, while the Russell 2000 index of U.S. small-caps fell 4.4%.
• The yield on 10-year Treasuries jumped almost 11 basis points to over 4.5%, the highest level in more than six months.

💭 Neil's thought bubble: This is not a case where markets are being irrational. Fourteen of 19 Fed leaders see two or fewer rate cuts next year, and they have bumped up their inflation forecasts after a summer/fall worrying a lot about the labor market. The worm has, once again, turned.

What they're saying: "Today was a closer call, but we decided it was the right call," Powell told reporters today, referring to the decision to cut rates.

• "We are at or near a point at which it will be appropriate to slow the pace of further adjustments."

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News of a potential tie-up between Japan's second and third largest carmakers continued to gain steam today, with Honda and Nissan both confirming talks around some sort of collaboration.

The big picture: It's being billed as a rescue of Nissan (its stock was down 40% this year in Tokyo before the news), but a deal could strengthen both companies' positions in a shaky global car market.

State of play: The combination would need the blessing of France-based Renault, Nissan's largest shareholder, which is reported to be receptive.

• The combination would likely be probed closely by Japanese authorities, given the potential for job cuts, CNBC notes.
• And in the U.S., President-elect Trump could seek concessions in exchange for approval, Reuters notes, citing auto industry officials.

⚖️ The U.S. Supreme Court will take on the TikTok sale-or-ban case. (Axios)

🛜 U.S. investigators are considering banning TP-Link home-internet routers. (WSJ)

Grubhub will pay $25 million to settle allegations from the FTC and the State of Illinois that it deceived users and drivers over fees and listed up to 325,000 restaurants on its platform without permission.

The big picture: The settlement will require the company to make major changes and is a part of the FTC's ongoing targeting of junk fees.

What's next: The settlement requires Grubhub to make changes to its business practices, including not adding surprise fees to delivery totals, providing a simple way to cancel Grubhub+ subscriptions, stop listing unaffiliated restaurants and not making misleading driver-earning claims.

• In a statement on its website, the company denied the allegations listed in the complaint and stated that "settling this matter is in the best interest of Grubhub and allows us to move forward."

The bottom line: The $25 million will be mainly used for customer refunds.

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Year-end lists are out, and topping the NYT's best comedy roundup is Ronny Chieng, whose "Love to Hate It" on Netflix was named the best special of 2024.

Zoom in: The bit I found most impressive from his show — as someone who communicates business and economics to the public — was a two-minute joke that began with an observation of polarization in the U.S. and ended with a stream-of-consciousness rant about the effects of lower capital gains taxes, the value of the U.S. dollar and the decline of domestic manufacturing on working-class families.

Zoom out: Watching Chieng's special left me even more convinced of a thought bubble I had earlier this year about why Netflix and other streamers are investing in stand-up content:

• Comics offer high ROI on labor. They write and perform their own material with relatively low production overhead. They can also draw in-person crowds to help steamers build events businesses to augment revenue.

It's no wonder the business of comedy has been booming.