Santa may be warming up his sled, but what’s next this holiday season? While many of us will be filling our stockings and tree with presents, investors should be watching the Federal Reserve and the bond market. The Federal Reserve is likely to reduce interest rates closer to the zero rate, as it tries to stimulate the economy. Lower interest rates could encourage borrowing and investment, making it easier for businesses and consumers to take out loans and buy goods and services. This could be a potential boon to investors, since more business spending could lead to more profits. The bond market is another factor for investors to keep an eye on. Bond prices have been increasing recently, which is often a sign of economic stability. This could mean higher availability of credit to businesses and consumers, and lower borrowing costs. On the flip side, if interest rates jump and bond prices drop, investors may take a hit. Finally, investors should keep an eye on the US dollar. A strong dollar can make it harder for businesses and consumers to buy goods and services and pay down debt. Again, if the dollar takes a nosedive, investors may be in for a wild ride. While Santa may be ready to hit the skies, investors should keep an eye on the Federal Reserve, the bond market, and the US dollar this holiday season. After all, a little preparation and knowledge can go a long way in the stock market!