It was a week that invited investors to look past the headlines and focus on what really mattered. In the US, the Supreme Court struck down a set of emergency‑authority tariffs, briefly easing some pressure on import costs, but the administration quickly moved toward a new set of across‑the‑board duties. The result was a mixed picture rather than a clean shift, with markets weighing the possibility of some relief now against the chance of renewed pressure later. At the same time, US-Iran developments moved between diplomatic talks in Geneva and news of additional military assets heading toward the region, a combination that kept a modest premium under oil prices without unsettling broader risk sentiment.
It was a week that rewarded patience. In the US, January CPI rose 0.2% MoM and 2.4% YoY, a softer print signalling disinflation remains on track. The jobs report, released mid‑week instead of Friday, pointed to cooling without collapse, keeping focus on how far prices can ease before growth slows. Those signals nudged bond yields lower and steadied overall risk sentiment.
The week unfolded against a backdrop of mixed economic signals and cautious policy stances across major central banks. In the US, the temporary government shutdown meant the January Employment Situation report did not arrive as planned, leaving investors without one of the week’s most closely watched data points. The Bureau of Labor Statistics confirmed the release would be rescheduled once funding resumed. This created a quieter information environment, with markets leaning more on surveys and company guidance than usual.
Markets spent the week juggling two familiar forces: what central banks are willing to say, and what the data is quietly implying. The key anchor was the Fed’s January decision, where policymakers kept the policy rate unchanged at 3.50% to 3.75%. In its statement, the Fed repeated that growth has been “expanding at a solid pace”, noted that job gains have “remained low” with the unemployment rate showing “some signs of stabilisation”, and said inflation remains “somewhat elevated”.
Investor sentiment was shaped by steady (not accelerating) macro signals and a market that is increasingly priced for policy inertia. In the US, inflation remained contained (Dec CPI ~+2.7% YoY; core ~+2.6% YoY), reinforcing expectations that the Fed is unlikely to change rates at its January meeting. With growth data only producing modest surprises (rather than persistent upside/downside momentum), markets continued to treat the near‑term outlook as “stable but not strong,” which kept risk appetite contained and encouraged selective positioning rather than broad risk‑on exposure.
