January 29, 2026 Headlines

The Treasury curve is twisting modestly steeper this morning with front-end yields down a basis point and long-end yields 1-2 basis points higher.

Initial jobless claims were little changed last week at 209,000, still a historically low figure. The number of people continuing to receive unemployment benefits fell for the third consecutive week to the lowest level since May 2024. In other news, the trade deficit nearly doubled in November from $29.2 billion the prior month (the lowest deficit since 2009) to $56.8 billion. The change included a 5% m/m increase in imports and a 3.6% m/m decrease in exports.

Yesterday’s FOMC decision and guidance were largely in line with market expectations. There was no rate cut, and the official statement (OS) and Powell’s press conference commentary painted a picture of a Fed comfortably on hold for the time being. The labor market assessment in the OS was upgraded versus the prior meeting, noting that “the unemployment rate has shown some signs of stabilization,” and the assessment of overall economic growth was more upbeat. There was no material change in market pricing for future Fed interest rate policy following the meeting. Fed funds futures continue to price for two 25 basis point cuts in the second half of this year. 

Jason Haley
Chief Investment Officer