Good Afternoon. We got a little of everything: a Fed pause with dissents, China debt math that starts with a “3,” and Wall Street debating whether gold’s next stop is $5,400 or $6,000. In the middle of it all, Starbucks managed the rarest feat of 2026: more people actually showed up. Let’s get into it.

—Rosie, Wyatt, Evan & Conor

🔥 What’s Hot: 🔥

🥶 What’s Not: 🥶

1. Fed Hits Pause

The News: The Federal Reserve held its benchmark rate steady at 3.50%–3.75% on Jan. 28, 2026, pausing after three quarter-point cuts in late 2025. The decision passed 10–2, with Governors Christopher Waller and Stephen Miran dissenting in favor of another 25 bp cut. Markets wobbled: the S&P 500 briefly crossed 7,000 before giving back gains, while the dollar rebounded as investors weighed Chair Jerome Powell’s press conference and fresh political crosswinds.

Why It Matters: A Fed “hold” keeps borrowing costs from falling further, for now. For markets, the bigger story is confidence in the institution: Powell is under a Justice Department probe and attended Supreme Court arguments tied to President Trump’s effort to remove Fed Governor Lisa Cook, underscoring why “Fed independence” has become a tradable macro input by itself. When politics enters the rate narrative, currencies and gold tend to react first—gold pushed to fresh records as the dollar story stays jumpy.

What to Watch: Watch the next two FOMC meetings and any signal on the May 2026 Fed chair transition—markets will reprice quickly if the White House telegraphs a more aggressive cutter. The Fed has paused; the uncertainty has not.
Source: wsj.com

2. Wall Street’s Gold Targets $6,000

The News: Bullish gold calls are stacking up fast. Goldman Sachs raised its end-2026 gold forecast to $5,400/oz from $4,900 (announced Jan. 22, 2026), citing “sticky” private hedging demand and sustained central-bank buying that it expects to average ~60 metric tons per month. This week, Deutsche Bank lifted its target to $6,000/oz and noted that in alternative scenarios gold could run even higher. The structural bid is increasingly visible: Morgan Stanley says foreign central banks now hold about $4 trillion in gold, slightly more than their $3.9 trillion in U.S. Treasuries, something it says hasn’t happened since 1996.

Why It Matters: Gold at these levels is a big, blinking “confidence premium” on the global system often associated with worries about inflation, fiscal sustainability, and currency volatility. For investors, the key shift is who’s buying: central banks and long-horizon allocators tend to be slower to reverse than fast money, which is why strategists are treating this as a regime change, not a trade. That said, these targets also assume the fear bid sticks; if perceived macro/policy risks fade, hedges can unwind.

What to Watch: Watch central-bank purchase data (monthly WGC updates) for any cooling from the ~60-ton pace Goldman is modeling, and watch Western ETF flows, they’re the swing factor that can turn a grind into a sprint.
Source: investing.com

3. Starbucks Posts First Positive Sales Growth in Two Years

The News: Starbucks (SBUX) reported fiscal Q1 2026 results on Jan. 28, 2026 showing its first meaningful sales momentum in a while: global comparable sales +4% (vs. ~+2.3% expected, per estimates cited in coverage) and net revenue ~$9.9B (+6% YoY). North America comps rose 4%, driven by +3% transactions and +1% ticket, a key milestone after a long stretch of traffic declines. The catch: profitability took a hit—GAAP operating margin fell to 9.0% from 11.9%, pressured by labor investments, restructuring charges, and cost inflation.

Why It Matters: A Starbucks traffic rebound usually shows up as faster service, better staffing, and fewer “sorry, we’re out of that.” moments—but it can also foreshadow tighter promo discipline if demand is strong enough to hold pricing. For investors, this is the classic turnaround tradeoff: Niccol’s “Back to Starbucks” is helping bring customers back, but it’s buying that growth with higher costs. With the stock up roughly ~14% YTD, the market is already leaning in—so the question is whether sales momentum can keep building without margins staying stuck.

What to Watch: Watch Starbucks’ investor day on Jan. 29, 2026 for long-term targets, especially margin recovery plans, store-level productivity, and any timeline for labor investments to translate into sustained traffic gains. Also watch U.S. transaction trends over the next quarter; a turnaround is real when it survives the calendar, not just the headline.
Source: investor.starbucks.com

4. NYC Mayor Mamdani to Propose Tax Hikes on Wealthy

The News: New York City Mayor Zohran Mamdani is set to use his first budget address on Jan. 28, 2026 to press state leaders for tax hikes aimed at closing a $12.6B two-year budget hole ($2.2B in FY2026 and $10.4B in FY2027, per Comptroller Mark Levine). His plan includes a 2% NYC income-tax surcharge on individuals and businesses earning >$1M (estimated ~$4B/year) and raising the state corporate tax rate to 11.5% from 7.25% for about 1,000 of the city’s most profitable firms (estimated ~$5B/year). The catch: any changes require approval from Albany—the state legislature and Gov. Kathy Hochul, who has proposed a no-income-tax-hike budget.

Why It Matters: For New Yorkers, this is a direct-wallet story: if Albany signs off, high earners and large corporations would pay more and the city says that money would fund big-ticket priorities like universal childcare and free buses, potentially shifting costs from riders and parents to taxpayers at the top. For investors and employers, the risk is behavioral: NYC’s revenue base is already concentrated, and even small changes in where high earners live or book income can swing tax receipts. That’s why watchdogs warn that reliance on a small slice of taxpayers can make budgets more volatile in downturns.

What to Watch: Watch two deadlines: Mamdani’s preliminary budget due Feb. 17, 2026 (after a City Council extension) and Albany’s posture as state budget negotiations grind on. Also watch Hochul’s signals, she’s avoided tax hikes so far, and without her buy-in, this becomes a messaging campaign, not a revenue plan.
Source: news.bgov.com

5. NYSE Owner Launches Tool to Turn Reddit Chatter into Trading Signals

The News: Intercontinental Exchange (ICE), parent of the NYSE, launched Reddit Signals and Sentiment on Jan. 28, 2026, a product that uses AI to translate millions of public Reddit conversations into real-time and historical sentiment indicators for institutional investors. ICE says the dataset runs on anonymized public data (no individual user tracking) and is distributed through its data platforms, including the ICE Consolidated Feed, with trend graphs that link chatter to specific companies and securities via ICE’s entity database. The launch builds on ICE and Reddit’s Feb. 11, 2025 agreement to use Reddit’s Data API to create financial analytics products.

Why It Matters: For everyday investors, this is the institutionalization of what retail traders have known since GameStop 2021: attention can move prices. For funds and trading desks, it’s another attempt to compress the information cycle and quantify “crowd narrative” as a risk and alpha input—especially useful when markets are headline-driven and momentum spikes can be self-fulfilling. For Reddit, it’s also part of the broader monetization push: turning conversation into a measurable asset class.

What to Watch: Watch adoption among data-heavy quant shops and whether ICE can demonstrate predictive value (signal stability, false-positive rates, and how quickly sentiment decays). Also watch the privacy and market-integrity conversation—“anonymized” is comforting until regulators ask how the sausage is made. Wall Street is officially reading the comments section just on their Bloomberg terminal instead of their phone.
Source: businesswire.com

1. China Hit 4.5% Growth And 302% Leverage

The News: China’s economy grew 5.0% in 2025, hitting Beijing’s target as GDP reached 140.19 trillion yuan (~$20 trillion), but momentum faded into year-end and the debt load kept rising. A Chinese think tank under the Chinese Academy of Social Sciences said China’s macro leverage ratio (total debt vs. nominal GDP) climbed 11.8 percentage points to 302.3% in 2025, driven largely by weak nominal GDP growth rather than a credit boom. The year’s headline stability leaned heavily on trade—China posted a record trade surplus near $1.2 trillion, while Q4 growth slowed to 4.5% YoY, the weakest since late 2022.

Why It Matters: This is the “exports strong, home demand soft” mix: jobs and income feel less secure when the growth engine is factories and trade rather than household spending especially with property still a drag. For markets, a 300%+ leverage ratio raises the stakes of any slowdown: when debt rises faster than nominal growth, policymakers have less room for error, and confidence becomes more sensitive to policy tweaks and credit events. The silver lining is in the composition: household borrowing growth has cooled sharply, suggesting risk is shifting toward government and corporate balance sheets, not a fresh consumer credit binge.

What to Watch: Watch Beijing’s 2026 growth target and stimulus mix ahead of the next policy meetings especially support for services consumption and local-government debt management. The feeling is similar, even governments buried under a mountain of debt still need to pay their bills.
Source: yicaiglobal.com

2. Mexico and the U.S Agree on USMCA Talks

The News: The U.S. and Mexico agreed on Jan. 28, 2026 to launch formal talks on structural reforms to the USMCA, ahead of the pact’s mandated Joint Review due by July 1, 2026, the U.S. Trade Representative said after a Washington meeting between USTR Jamieson Greer and Mexico’s economy secretary Marcelo Ebrard. Priority items include tougher rules of origin for key industrial goods, deeper cooperation on critical minerals, and tighter alignment to counter “dumping,” alongside “intensive engagement” to address non-tariff barriers. The backdrop is massive: USTR pegs North American trade at nearly $2 trillion annually.

Why It Matters: USMCA tweaks can hit prices and availability in plain sight. Think autos, appliances, and electronics that all depend on cross-border supply chains where a small rule change can mean higher compliance costs (and eventually higher sticker prices). Tougher origin rules and mineral coordination could pull more production into North America and reduce exposure to China-linked inputs. For markets, the key is predictability: a smoother review process supports nearshoring investment; a messy one invites tariff threats and supply-chain whiplash.

What to Watch: Watch whether this stays bilateral (U.S.–Mexico) or expands into full trilateral negotiations with Canada as July approaches. Experts have been expecting a more bilateral posture. Trade reviews in previous administrations didn’t sound dramatic, now that’s all we hear about.
Source: ustr.gov

3. Tariffs Took Billions From GM and Kia

The News: New earnings reports put a price tag on 2025’s auto trade fight: GM said tariffs cost it $3.1B last year and it expects another $3B–$4B hit in 2026, even after offsetting about 40% of the impact through cost cuts and production shifts. Kia said tariffs cut earnings by 3.09T won (~$2.2B) in 2025 and forecast 3.3T won in tariff costs this year, despite posting record revenue (114.14T won, +6.2% YoY) while profit fell (operating profit 9.08T won, -28.3%; margin 8% vs. 11.8% in 2024). The policy risk is rising again: Trump said he would raise tariffs on certain South Korean imports to 25% from 15%, a move that would pressure Kia/Hyundai and also hit GM models sourced from Korea.

Why It Matters: For car buyers, this is how tariffs become a line item on the window sticker. JPMorgan estimates Year 1 vehicle-and-parts tariffs equate to about $2,580 per vehicle (≈5.8% of the average retail price) and it expects “for the most part” automakers and consumers to split that tab. For automakers and investors, the margin math is ugly: GM’s 2025 EBIT-adjusted margin slid to about 6.3%, and Kia’s margin compression shows how quickly tariff costs can overwhelm even record top-line numbers. Companies can mitigate with reshoring and sourcing changes, but those fixes take quarters or years.

What to Watch: Watch whether the threatened South Korea tariff hike becomes formal policy, and whether automakers respond with price increases, trimmed incentives, or faster production shifts (all three tend to show up eventually). Also watch the next round of guidance: if more firms start baking “tariff permanence” into 2026 forecasts, the market will treat this less like a temporary surcharge and more like a new cost of doing business. Turns out “free trade” was a pretty good deal for most.
Source: koreajoongangdaily.joins.com

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