Financial market returns were quite mixed in December with modest losses for both U.S. bonds and U.S. stocks. Six of eleven U.S. stock market sectors posted losses. For the full year, however, all sectors posted gains. Foreign stocks outpaced U.S. stocks both for the month and for the year. Some of this performance disparity reflected a weaker U.S. dollar. U.S. Treasury, 10-year bond yields backed up modestly to 4.12% even as the Federal Reserve cut its target policy rate 0.25%. This policy change came amidst the Fed’s sensitivity to shifting risks even as uncertainty over the inflation outlook and labor market trends remained elevated.