MSD Weekly Market Update: Week Ending January 30, 2026
The highlight of the past week was the largely uneventful FOMC meeting at which, as expected, rates were left unchanged. While two officials unsurprisingly dissented on the decision and were in favor of a cut, Chair Powell noted a strong consensus within the Fed to keep rates steady. The Fed noted that unemployment has shown signs of stability and that activity has expanded at a solid pace while inflation remains somewhat elevated. The official statement also removed comments that had noted rising downside risks to employment. The reaction in the rates market was minimal. A pause by the Fed was likely bolstered as well by the lingering uncertainties from delayed and/or partial data, owing to the government shutdown in the Fall, tariff policy and court rulings thereon, and the upcoming transition in Fed leadership this spring. The week ahead offers a few labor market-related reports of which the employment situation report on the 6th should be the most prominent and influential. These reports should add context to the FOMC and Powell’s comments regarding employment dynamics.
