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SFM Market Commentary: 1/30/26

In the last two weeks, key economic data showed the Federal Reserve’s preferred inflation gauge at 2.8%, signaling persistent inflationary pressures above target while consumer spending and economic growth demonstrated solid momentum. Meanwhile, significant geopolitical and policy developments have emerged, including a major US-Taiwan trade agreement and new legislative proposals to secure critical minerals. Let’s dive in!

  • Inflation Outlook: November’s PCE inflation rate held steady at 2.8%, slightly above the Federal Reserve’s target, signaling persistent price pressures. This supports expectations that the Fed may limit further rate cuts despite previous easing in 2025, balancing inflation risks with economic resilience.
  • GDP Revision: The U.S. GDP grew at a revised 4.4% annualized rate in Q3, driven by consumer spending, exports, and business investment. Economists noted a K-shape pattern where higher-income households and big corporations are driving growth, while lower-income groups contribute less.
  • Consumer Spending Strength: U.S. consumer spending rose 0.5% in both October and November, driving expected robust economic growth into a third consecutive quarter. This sustained spending supports market sentiment and may influence the Federal Reserve’s decision to hold interest rates steady.


  • Personal Income Growth: U.S. personal income rose by $30.6 billion (0.1%) in October and $80.0 billion (0.3%) in November 2025, driven by higher compensation and government benefits, while personal consumption expenditures increased 0.5% each month. Personal savings rates slightly declined to 3.5%.
  • Regional Diversification: Some investors are shifting away from U.S. mega-cap tech stocks toward international markets like Japan, China, and Europe, as well as U.S. small-cap and less tech-heavy indices, highlighting the importance of diversification across regions and sectors for portfolio resilience.
  • Healthcare Spending: U.S. healthcare spending grew 7.2% to $5.3 trillion in 2024, driven by higher insurance enrollment and medical service use. Government admin costs, especially Medicaid, saw the largest increase, while hospital pricing and private insurance enrollment also contributed to overall growth.


  • Critical Minerals Stockpile: A bipartisan U.S. bill proposes a $2.5 billion Strategic Resilience Reserve to stockpile critical minerals like lithium and rare earths. The fund aims to stabilize prices, support domestic mining, and reduce reliance on China by creating a market-insulated stockpile for defense and industry.
  • US-Taiwan Trade: The US and Taiwan agreed to reduce tariffs on Taiwanese goods to 15% and secured $500 billion in semiconductor investments in the US, including $250 billion in direct investments and $250 billion in credit guarantees to expand tech operations and supply chains domestically.
  • Greenland Deal: President Trump announced a NATO-backed framework addressing Arctic security and U.S. military access to Greenland but without transferring sovereignty from Denmark. Denmark and Greenland oppose any sovereignty change, and full negotiation details remain undisclosed.

Over the next two weeks, attention will turn to upcoming data releases on employment and manufacturing, providing further clarity on the labor market and industrial sector health. Additionally, U.S. lawmakers will advance legislation related to critical mineral stockpiles amid ongoing supply chain and national security considerations.

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