U.S. large-cap stocks gained 1.5% in the first month of 2026 while U.S. small-cap stocks rose by 5.4%. U.S. intermediate-term bonds were flat, rising by a modest 0.1%.
The Federal Reserve held rates at 3.50%–3.75% in January. Markets still expect the equivalent of two 0.25% rate reductions in 2026.
Affordability, inflation, and cost-of-living concerns are top priorities for voters ahead of the midterms, driving policies aimed at housing, a proposed 10% one-year cap on credit card rates, and the “Great Healthcare Plan.”
Mega-cap tech remains a key contributor to corporate earnings and growth, and results have been mixed.
Kevin Warsh has been nominated as the next Fed Chair and has argued that the Federal Reserve has become a drag on U.S. economic strength, moving too slowly and relying on outdated frameworks, which he claims undermine affordability and constrain economic potential.
January 2026 Commentary: A is for Affordability
Summary
Read and download the commentary here.
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