"Much of the discussion around financial markets continues to shift from one macro concern to another. Whether it's higher for longer interest rates (or simply overall Federal Reserve monetary policy), or trade/tariff policy, or geopolitical risks and a range of other medium-term risk factors that appear to be heating up, there's plenty for investors to digest on the horizon. Heading into the New Year, it's becoming clearer that investors who are looking at specific sectors are starting to pay more attention"
"The biggest and most important factor I think will drive interest rate decisions in the coming year will ultimately be the "hard" data the Fed utilizes to make its decisions. These data points, which include everything from inflation (as measured by PPI and CPI) to jobs market data, and other subjective and objective measures which come via surveys and other government agencies."
Financial-market focus keeps shifting across macro risks such as Federal Reserve policy, trade and tariff actions, geopolitical tensions, and other medium-term pressures. Sector investors are increasingly weighing both the current absolute level of interest rates and the projected path for the next one to five years. The market is pricing roughly two Fed cuts into 2026, but deteriorating "hard" data raise the likelihood of a more aggressive easing cycle. Key data include PPI, CPI, jobs metrics, and survey-based measures; unemployment moved from 4.0% in January 2025 to 4.6% by year-end. Rising unemployment has triggered the Sahm rule, and higher but stabilizing inflation combined with weak consumer sentiment could prompt a different Fed response.
Read at 24/7 Wall St.
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