Comments based on information available as of 6:00 am CT on 1/30/2026

Growth: When Slowing and Growing Don’t Mix

The Fed’s policy statement upgraded its assessment of economic growth from “moderate” to “solid.” That’s encouraging. However, when I look at what’s happening with earnings season, there are a few yellow flags out there. Companies that reported slowing earnings growth with growing capital spending didn’t fare that well. Companies that announced planned cost cuts were rewarded. Generally, investors seem to be looking more for cost discipline than aggressive expansion plans.

Inflation: Over the Hump

Inflation is still elevated, but the bump up from tariffs may be mostly behind us. Of course, now we have to contend with a weaker dollar. That could put upward pressure on import prices, but businesses price their products to the market they sell in. So a weaker dollar–just like a higher tariff–doesn’t mechanically mean higher prices in the US. Still, it’s not exactly helpful for easing inflation pressures.

Policy: A Hawk in Dove’s Clothing?

President Trump nominated Kevin Warsh to become the next chair of the Fed. Warsh served on the Fed’s Board of Governors from 2006 through 2011, so he has experience. He has advocated watching inflation like a hawk, slimming down the Fed’s balance sheet, and having looser bank regulations. Not all of those align with the idea that he’s a dovish pick who wants to aggressively lower rates. He has said that money for Wall Street is loose while money for Main Street is too tight. He may advocate for lower rates at the same as he pushes for more quantitative tightening (a smaller Fed balance sheet). Instead of falling neatly along the hawk-dove spectrum, we may have to wait and see exactly what type of monetary policy species he is. Like any good policymaker, he may change his views as the facts and circumstances change.

Looking ahead: Financials Over Feelings

Markets move based on flows: who is buying and who is selling. Prices move because someone wants out and someone else really wants in. The motives are sometimes based on financials, but–especially in the short-term–oftentimes it’s emotional, driven by the broad narrative or momentum. Financials have a way of reasserting themselves. Cash flows, balance sheets, and policy decisions eventually overpower mood swings and market chatter. Emotional currents can distort things for a while, but they don’t dominate forever. Feelings can move markets in the short run—but financials decide where they ultimately land, so check your motives and try to keep the emotions in check.