INFO THAT HITS US WHERE WE LIVE... The big news last week wasn't actually news to anyone, as virtually no one was surprised that the Fed hiked rates a quarter percent at the FOMC meeting, to the range of 1.25%-1.50%. The Fed's "dot plot," released at the last meeting every quarter, projects three more rate hikes next year. The latest increase was widely seen as reflecting the Fed's confidence in the U.S. economy. Their policy statement said: "the labor market has continued to strengthen" and "economic activity has been rising at a solid rate," plus they revised their GDP growth projection higher.

In fact, GDP has grown at better than 3% for two quarters, job growth is at a 10-year high and unemployment at a 17-year low. Plus, economists say low unemployment means businesses have to pay more for labor, putting upward pressure on wages, good for the housing market. Also good, national average 30-year mortgage rates went down last week. (See below.) Truth is, the Fed Funds Rate does not always lead to higher mortgage rates. Economists say it's tied to short-term consumer interest rates, although next year's three projected Fed hikes should nudge mortgage rates higher.

BUSINESS TIP OF THE WEEK... The holidays are a season of giving, a good time to think of ways we can give back to others and further serve our communities.

>> Review of Last Week

CLOSING IN ON TAX CUTS... Investors were clearly buoyed by the prospect that tax-cut legislation would soon be passed by both houses of Congress. The three major stock market indexes closed at record highs, with the Dow and the S&P 500 registering weekly gains for the fourth week in a row. By Fridayafternoon, it appeared that Republicans had enough support to pass their tax reform bill, but the final vote won't happen until early this week. Once both the House and Senate vote on the finalized bill, it will go to the President, who has already said it's his intention to sign it before Christmas.

One portfolio analyst noted, "There is definitely a momentum in the market thanks to the prospect of tax cuts, but let's not forget that the economic growth is also pretty good and has been supporting the market all year." More evidence of that growth came last week as Retail Sales shot up in November by 0.8%, following upwardly revised gains of 0.5% in October and 2.0% in September. Retail Sales are now up 5.8% from a year ago. Manufacturing continues to grow steadily, with factory capacity utilization at its highest level since 2008. Plus, both weekly and continuing jobless claims fell for the week.

The week ended with the Dow UP 1.3%, to 24652; the S&P 500 UP 0.9%, to 2676; and the Nasdaq UP 1.4%, to 6937.

It was a mixed week in the bond market, with shorter dated Treasuries down, but the long bond up. The 30YR FNMA 4.0% bond we watch finished the week down just .04, at $104.66. In Freddie Mac's Primary Mortgage Market Survey for the week ending December 14, national average 30-year fixed mortgage rates edged lower, remaining measurably down from a year ago. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.

DID YOU KNOW?... There are an estimated 83.1 Millennials in the country, the largest age group, representing more than a quarter of the U.S. population.

>> This Week's Forecast

NEW HOMES DIP, EXISTING HOMES BLIP, GDP STRONG, INFLATION WEAK... We get a complete look at the November housing market in a single week. Home building is forecast to slip a tick in both Housing Starts and Building Permits. Likewise, New Home Sales are predicted off for the month. But analysts see Existing Home Sales back up over the 5.5 million annual rate. The GDP - Third Estimate is expected to show economic growth still a solid 3.3%. Core PCE Prices, the Fed's favorite inflation measure, is forecast to barely budge.