Markets Digest Tariff Ruling as Inflation Pressures Persist

This week’s discussion reflects a market navigating slower growth and firmer inflation. Fourth‑quarter GDP shows a clear downshift, while PCE inflation surprised to the upside on both headline and core measures. The panel explains why sticky inflation and recent FOMC minutes raise the bar for rate cuts, with markets responding through higher front-end yields and a flatter curve. Investors are also assessing the Supreme Court Tariff Ruling, which adds policy uncertainty at a time when markets are already range‑bound. Ongoing rotation beneath the surface reinforces the importance of diversification and discipline in a choppy environment.

Speakers:

Brian Pietrangelo, Managing Director of Investment Strategy

George Mateyo, Chief Investment Officer

Rajeev Sharma, Head of Fixed Income

Stephen Hoedt, Head of Equities

01:55 — Industrial production shows modest January strength

03:53 — GDP slowdown and PCE inflation surprise

07:35 — Fed outlook, yields, and rate‑cut expectations

12:12 — AI uncertainty and sector rotation beneath the market

16:05 — Supreme Court tariff ruling and market implications

Additional Resources

Attend: Key Wealth National Call: Navigating Noise, Finding Meaning: A Conversation with Brian Portnoy, PhD, CFA

Read: Key Questions: Investing Before Lift‑Off – What Should Investors Know About Private Markets and the Next IPO Cycle?

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This week, we review a busy week of economic data, including updates on retail sales, employment, and inflation, and discuss what these signals mean for the broader economy. We ask how markets are digesting softening inflation, shifting Fed expectations, sector-level dispersion in equities, and ongoing volatility tied to AI-driven disruption. We end the episode with guest Sean Poe, Director of Investment Research at Key Wealth, who provides some guidance on how investors might think about IPOs, private markets and portfolio construction in the current environment.

Speakers:

Brian Pietrangelo, Managing Director of Investment Strategy, Key Wealth

George Mateyo, Chief Investment Officer, Key Wealth

Rajeev Sharma, Head of Fixed Income, Key Wealth

Steve Hoedt, Head of Equities, Key Wealth

Sean Poe, Director of Investment Research, Key Wealth

02:18 – Retail sales, employment report, inflation (CPI), and what they indicate about consumer strength and economic momentum.

05:17 – A macro interpretation and outlook, including recession expectations, labor market trends, housing’s role in inflation, and potential future Fed actions.

08:29 – We look at this week’s bond market reaction, shifts in rate cut expectations, Treasury yields, safe‑haven flows, and credit market sector performance.

13:00 – We break down the equity market dynamics, rising volatility, sector rotation, AI-driven disruptions, and the shift toward “HALO” (hard assets, low obsolescence) stocks.

16:15 – Sean Poe delivers a thorough overview of the state of the IPO market, why the IPO window closed in recent years, early signs of reopening, and the role of AI-driven capital needs. He also touches on implications for investors, including considerations around accessing IPOs, the role of private markets, and the importance of portfolio construction and advisor guidance.

Additional Resources

Read: Key Questions: Investing Before Lift‑Off – What Should Investors Know About Private Markets and the Next IPO Cycle?

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Markets absorbed a brief U.S. government shutdown, ongoing fourth‑quarter earnings, and fresh readings from the Institute for Supply Management: Services stayed in expansion while Manufacturing showed a tentative uptick. While the Bureau of Labor Statistics’ payroll report was delayed, other labor signals softened—job openings slipped to 6.5 million, weekly claims rose to 231,000, and the ADP private payrolls tally was only 22,000. Equity leadership shifted as AI pressure hit software stocks while investors favored tangible, cash‑flowing businesses and added non‑U.S. exposure. Credit stayed orderly—investment‑grade spreads widened slightly and high‑yield widened a bit more—while the riskiest tier gained a little over 1% year‑to‑date. Treasury yields eased; the European Central Bank and Bank of England held policy rates steady.

Speakers:

Brian Pietrangelo, Managing Director of Investment Strategy

George Mateyo, Chief Investment Officer

Rajeev Sharma, Head of Fixed Income

Stephen Hoedt, Head of Equities

00:01:35 — Week setup: shutdown ends, Q4 earnings, Services up, Manufacturing perks up.

00:03:10 — Jobs picture softens; big payrolls report pushed to next week; thoughts on the U.S. Dollar.

00:08:36 — AI tool sparks global software selloff; chips seen as enablers.

00:15:29 — Credit mostly calm; risk appetite cools a bit this week.

00:21:07 — Super Bowl picks and quick Ohio note to close.

Additional Resources

Read: Key Questions: Who Is Kevin Warsh and What Does His Appointment Mean for the Fed's Next Chapter?

Read: Comprehensive Key Numbers

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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?

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Happy New Year! In the first episode of 2026, we catch up on what we missed during the holiday break, and dig into the latest market and economic developments in the beginning of the year, including the Federal Reserve’s recent rate cuts, updated projections for GDP and inflation, and the impact of the government shutdown on economic data releases. The conversation covers labor market trends, productivity gains, and a notable geopolitical event in Venezuela, analyzing its implications for oil markets and global economics. We also explore expectations for future Fed actions, the evolving landscape of mortgage policy, and the importance of diversification in investment portfolios, offering listeners a clear and timely perspective on what to watch for in the year ahead.

Speakers:

Brian Pietrangelo, Managing Director of Investment Strategy

George Mateyo, Chief Investment Officer

Rajeev Sharma, Head of Fixed Income

Stephen Hoedt, Head of Equities

01:41 – Recap of the Federal Reserve’s recent rate cuts, projections for 2026, and analysis of GDP growth, inflation trends, and labor market data following the government shutdown.

06:46 – Insights on the Venezuela situation, its effect on oil markets, and broader geopolitical implications for investors.

12:14 – Inflation trends, consumer behavior, and Fed rate cut expectations for 2026

15:56 – Analysis of government intervention in mortgage markets, treasury yields, and implications for fixed income investors.

17:38 – Our thoughts on portfolio management, diversification strategies, predictions for recession odds, earnings, AI trends, and closing thoughts for investors.

Additional Resources

Read: Key Questions: What Will Be the Economic Impact of the Political Events in Venezuela?

Rewatch: Key Wealth National Call: Managing Wealth in an Age of Disruption and Change

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In this week's episode, our experts discuss recent market activity, economic data delays due to the recent government shutdown, and the Federal Reserve’s latest rate cut. The Fed’s decision was marked by rare dissent, reflecting uncertainty about inflation and future policy direction, with only one rate cut projected for 2026. We analyze the implications for credit markets, the US dollar, and the evolving role of artificial intelligence in corporate strategy, noting shifts in tech stock performance and the importance of distinguishing winners and losers in the AI space. The conversation also draws parallels to past market bubbles, emphasizing the value of diversification and caution as the year ends. Be sure to review our 2026 Outlook: Managing Wealth in an Age of Massive Disruption and Profound Change to see what key themes we believe will most impact the economy in 2026.

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

01:27 - Recent market activity is discussed, including delays in economic data due to a government shutdown, updates on unemployment claims, and the job openings report.

03:26 - Cindy Honcharenko summarizes the Fed’s decision to lower rates for the third time in 2025, the rare split vote among Committee members, and implications for inflation and the labor market.

08:10 - The panel analyzes the Fed’s outlook, credit spreads, risk appetite, and the importance of understanding why the Fed is cutting rates.

13:29 - Discussion in recent trends in the US dollar, commodity prices, and the impact on corporate America.

15:45 - The panel covers the impact of AI on stock performance, recent news from Oracle and Broadcom, and the evolving tech landscape.

Additional Resources

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

Rewatch: Key Wealth National Call: Managing Wealth in an Age of Disruption and Change

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