The Fed stayed put, inflation hasn’t cooled enough, and investors are penciling in the next rate cut at mid‑year. A light data slate backed that view—jobless claims remained low, productivity stayed strong, and producer prices firmed. The FOMC held rates at 3.50%–3.75% with two dissents for a 0.25% cut, keeping the focus on data while markets handicap a shallow easing path. Kevin Warsh’s nomination adds policy‑risk questions and could mean more debate inside the Committee. Equity breadth is improving as mega‑cap results diverge on AI spending, arguing for neutral risk with a quality tilt.

Speakers:

Brian Pietrangelo, Managing Director of Investment Strategy

Cynthia Honcharenko, Director of Fixed Income Portfolio Management

George Mateyo, Chief Investment Officer

Rajeev Sharma, Head of Fixed Income

Stephen Hoedt, Head of Equities

00:01:35 — Week‑in‑review: jobs steady, productivity strong, prices a bit firmer

00:03:05 — Re-cap of this week’s FOMC Meeting

00:05:19 — New Fed chair nominee Kevin Warsh; implications for policy independence and risk

00:09:58 — Market prices a mid‑year cut; curve steepens as front‑end yields slip

00:13:04 — Mega‑cap earnings mixed; AI capex divergence; breadth improving

00:21:08 — Disclosures and methodology; firm and product notices

Additional Resources

Read: 2026 Outlook: Managing Wealth in an Age of Massive Disruption and Profound Change

Read: Key Questions: Why Have Bond Yields Remained High Even as the Fed Has Cut Rates?

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A steady, broadening market week: breadth improved beyond the mega‑caps, volatility’s blip faded, and PCE inflation continues to run at a pace consistent with the Fed’s target while stale data keeps focus on next week’s FOMC meeting. We also discuss the bond markets, Fed independence and the next Fed Chair. We wrap with a quick policy roundtable—credit‑card APR caps, potential GSE MBS buying, and housing supply signals—and what it could mean for portfolios.

Speakers:

Brian Pietrangelo, Managing Director of Investment Strategy

Rajeev Sharma, Head of Fixed Income

Stephen Hoedt, Head of Equities

00:02:06 — This week’s macro: initial unemployment claims steady; 3Q25 GDP revised up to 4.4%; PCE inflation trend; FOMC ahead.

00:07:37 — Breadth & sector rotation; healthcare strength vs. tech consolidation; index context near the 50‑day.

00:16:28 — Policy roundtable kicks off: proposed 10% credit‑card APR cap—bank and $70B card ABS implications.

00:20:03 — GSE MBS buying discussion: potential mortgage‑rate effects and signaling on growth/deregulation.

00:24:29 — Wrap up & disclosures; where to follow up with your advisor.

Additional Resources

Read: Key Questions: What Are the Top Changes to Social Security in 2026? | Key Wealth

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A steady but complicated start to 2026: inflation isn’t flaring, retail spending held up, and the Beige Book nudged higher while jobless claims stayed low. With a January interest rate cut likely off the table, markets are eyeing mid‑year moves, as the Fed navigates political noise and confidence in credit remains high—even as spreads sit near cycle tights. We dig into what that mix means for positioning right now, then tackle the power story—AI‑driven demand, a pricier generation mix, and grid bottlenecks—why electricity costs likely stay elevated and how it can ripple through portfolios.

Speakers:

Brian Pietrangelo, Managing Director of Investment Strategy

George Mateyo, Chief Investment Officer

Rajeev Sharma, Head of Fixed Income

Michael Bove, Senior Equity Research Analyst

01:34 – CPI inflation steady, retail sales rebound, Beige Book edges higher, and jobless claims stay historically low.

05:13 – Inflation’s “catch up” effects, a K shaped consumer, and why headline labor reads can look stronger than they feel.

08:14 – No January rate cut; markets lean toward two cuts starting mid-year as political noise clouds the Fed backdrop.

11:21 – Credit spreads at/near tights: confidence vs. complacency and how a single default could ripple through high yield.

14:16 – Electricity prices rise amid AI driven demand, a costlier generation mix, and multiyear interconnection backlogs—no short-term fix.

17:10 – Closing notes, MLK Jr. Day reminder, and where to find ongoing insights and guidance.

Additional Resources

Read: Key Questions: What Do Investors and Consumers Need to Know About Rapidly Rising Electricity Prices?

Key Questions

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