29/01/2026 Daily Reports
Top Highlights from the Fed Decision
- A Divided Vote: The decision wasn’t unanimous. The Fed voted 10-2 to hold rates, with Stephen Miran and Chris Waller dissenting in favor of a 25bp cut.
- Hawkish Shift in Tone: The Fed removed previous language about “downside risks to employment” and described economic growth as “solid.” This suggests they are less worried about a recession and more focused on current stability.
- Tariff Impact: Chair Powell noted that inflation from tariffs hasn’t hit as fast or as hard as feared, allowing slowing rents and lower energy costs to keep inflation trending toward the 2% target.
- The “Shadow” Successor: With Powell’s term ending May 15, all eyes are on the race for the next Chair. Rick Rieder and Kevin Warsh currently lead the pack in prediction markets, ahead of Governor Waller.
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Markets Weigh Fed Pause and Earnings as Oil Holds Near Highs on Geopolitics
- Global markets navigated a cautious but uneven session after the U.S. Federal Reserve held interest rates steady in the 3.5%–3.75% range, effectively pausing its prior rate-cut cycle. The decision triggered mixed reactions across risk assets, particularly in tech-heavy indices. Nasdaq futures showed resilience in pre-market trading, supported by upbeat sentiment following recent earnings from Tesla and Meta, while investor attention turned to major Q1 2026 results due from Apple, Visa, and MasterCard.
- In Europe, sentiment was more restrained. Stronger-than-expected German manufacturing data provided some support to the euro and limited downside pressure in the DAX, but early trading still saw the index edge lower. Broader European markets reflected a cautious tone, with selling concentrated in banking and healthcare stocks as investors remained selective ahead of further macro and earnings signals.
- Asian markets were more clearly pressured. Japan’s Nikkei 225 closed lower as the Fed’s decision to pause rate cuts weighed on technology and growth stocks across the region. Risk aversion was further amplified by rising geopolitical tensions in the Middle East, prompting a shift toward safe-haven assets and reducing appetite for Japanese equities.
- In commodities, Brent crude remained firm near four-month highs around $69 per barrel. Prices were underpinned by escalating U.S.–Iran tensions and warnings of potential military action, alongside supportive supply factors. An unexpected 2.3-million-barrel draw in U.S. crude inventories and production disruptions caused by severe winter storms tightened near-term supply. A weakening U.S. dollar, hovering near four-year lows, added further support by improving oil’s attractiveness for international buyers.
- Overall, markets are balancing a Fed policy pause, key earnings catalysts, and rising geopolitical risks, with energy prices staying elevated even as equity sentiment remains mixed.
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