Weekly Macro Briefing

Macroeconomics, Industries and Politics
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Weekly Macro Brief Ending January 26, 2026

  • The real macro swing factor is Fed independence risk, not next week’s data:
    JPMorgan Asset Management says the key issue for markets is whether monetary policy remains set by the Fed vs. political pressure, after Powell referenced subpoenas tied to renovation testimony and framed it as an independence issue. [JPM-AM]

  • Base case remains “growth holds up, inflation not yet solved” — so the Fed likely pauses: Wells Fargo expects no change at the January meeting; growth is supported by resilient consumer spending and AI capex, but rate cuts are getting harder to justify with inflation still above target. BlackRock also expects the Fed to hold given mixed jobs/inflation signals. JPMorgan Asset Management argues the case for holding is strong: labor supply constraints (lower immigration) keep the labor market “tight,” and tariff pass-through plus tax-refund demand could re-lift inflation near mid-year. [WF ] [BLK] [JPM-AM]

  • “Sell America” is more a headline risk than a durable regime (for now):
    JPMorgan Asset Management Wealth Management says Europe’s two “big retaliation” threats (services restrictions via ACI and dumping Treasuries) are unlikely because the self-inflicted damage would be huge. Merrill similarly argues foreign demand for U.S. assets remains strong (foreign ownership of U.S. securities at record levels), even amid de-dollarization talk. Yardeni also frames the administration’s Greenland/tariff episode as “negotiating style” but flags the wider geopolitical tail risk and “policy theater” risk. [JPM-WM] [MER] [EY]

  • The bond market is the transmission channel — and Japan is the volatility amplifier: BlackRock says the January yield spike (notably Japan long bonds) was largely driven by tariff threats + fiscal worries and shows “immutable laws” constraining policy extremes when debt financing depends on foreign capital. Yardeni also highlights Japan’s long-end yield surge as a “something could break” risk even if the carry trade is more resilient than feared. [BLK] [EY]

GPT Summary (Notion)

Sources:

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