Market Musings 1/26/2026
Quick thoughts on the markets and major portfolio news. Not on Ursa yet? Download Ursa from the App Store!
No #RateCuts expected this meeting, but what comes next?
This Fed meeting won’t about #RateCuts this time, but it’ll be all about what comes next…
It’s the first Fed meeting of the year, and despite pressure from the White House, markets aren’t pricing in any #RateCuts this time. Instead, investors will be closely watching for signal on the Fed’s expectations for the rest of the year.
Right now, expectations still point to two or more #RateCuts before year-end.
What are markets watching?
First, #Inflation. Recent #Inflation data has been moderate. While CPI and PPI have been a bit choppier, Core PCE, the Fed’s preferred #Inflation gauge, has been running close to target — rising about 0.2% M/M for the past several months now.
The big question is whether the Fed views that as real #Inflation progress or still unsure about #Tariffs and policy impact and wants to stay in wait-and-see mode.
The other side of the equation is #LaborMarkets. Nonfarm payrolls growth has slowed but remains positive with small gains in November and December. Meanwhile, unemployment also appears to have bottomed out (at least for now).
That’s good news for the economy and supports the #Goldilocks soft landing narrative, but it may also give the Fed more time to see #Inflation progress before making additional cuts.
This meeting won’t be about action, but all about tone. Expect markets to read between the lines on Wednesday’s press release and during Powell’s press conference after.
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Original Photo by Pixabay.