This story was originally published on CFO Dive. To receive daily news and insights, subscribe to our free daily CFO Dive newsletter. Dive Brief: Several Federal Reserve officials voiced concern that inflation persists above their 2% goal and cautioned that further monetary easing could signal a weaker commitment to reducing price pressures, according to minutes of their Jan. 27-28 meeting released Wednesday.  A “vast majority” of Fed officials noted at the meeting that the labor market showed signs of ...

US stock futures rose on Wednesday following a muted day on Wall Street, as investors looked ahead to fresh signals on inflation and monetary policy. Contracts on the S&P 500 (ES=F) and the tech-heavy Nasdaq 100 (NQ=F) both rose 0.3%. Meanwhile, Dow Jones Industrial Average futures (YM=F) edged up roughly 0.2% after the major US gauges closed Tuesday with modest gains. Investors now turn their attention to the Federal Reserve’s January meeting minutes, due Wednesday, for additional insight into policyma ...

Core Viewpoint - The Federal Reserve Governor Barr stated that the prosperity of artificial intelligence (AI) is not sensitive to monetary policy [1] Group 1 - AI advancements are not expected to significantly influence the Federal Reserve's monetary policy decisions [1] - The impact of AI on economic growth and inflation remains uncertain, suggesting a cautious approach in assessing its effects on monetary policy [1]

Meridian Funds, managed by ArrowMark Partners, released its fourth-quarter 2025 investor letter for “Meridian Hedged Equity Fund”. A copy of the letter can be downloaded here. U.S. equity markets experienced a quarter supported by optimism about potential monetary easing and caution regarding economic growth and valuations. Early gains were driven by strong AI-related earnings and the US Federal Reserve’s rate cut in October, which improved expectations for financial conditions. However, market sentiment c ...

Meridian Funds, managed by ArrowMark Partners, released its fourth-quarter 2025 investor letter for “Meridian Hedged Equity Fund”. A copy of the letter can be downloaded here. U.S. equity markets experienced a quarter supported by optimism about potential monetary easing and caution regarding economic growth and valuations. Early gains were driven by strong AI-related earnings and the US Federal Reserve’s rate cut in October, which improved expectations for financial conditions. However, market sentiment c ...

Core Viewpoint - ProShares SQQQ is designed to profit when the Nasdaq-100 declines, but its daily rebalancing mechanism leads to significant long-term losses, making it suitable only for short-term tactical plays [1] Group 1: Performance Metrics - SQQQ gained 6.2% year-to-date as tech stocks faced pressure from higher interest rate concerns [1] - Over the past year, SQQQ dropped 42.3%, illustrating the decay effect from daily rebalancing despite the Nasdaq-100's modest rise [1] Group 2: Market Dynamics - The performance of SQQQ is heavily influenced by the Federal Reserve's monetary policy, particularly whether it maintains a restrictive stance or signals a dovish pivot [1] - Tech valuations are sensitive to real interest rates, with higher rates leading to downward repricing of growth stocks, benefiting SQQQ [1] Group 3: Leverage Mechanics - SQQQ employs 3x daily leverage, which creates a compounding problem over time, making its performance over longer periods unpredictable [1] - The fund's daily reset means that during volatile markets, the expected returns may not align with the 3x inverse of the Nasdaq-100's movement [1]

Economic Performance - Japan's economy showed a meager growth of 0.2% in the fourth quarter, significantly below the expected 1.6% increase, following a revised contraction of 2.6% in the previous quarter [3] - The quarterly growth rate was only 0.1%, again falling short of the median estimate of 0.4% [3] Government Response - Prime Minister Takaichi's administration plans to increase public spending to boost consumption and economic growth following a recent election victory [1] - There is a focus on suspending the consumption tax, particularly on food, as sluggish economic activity may prompt quicker fiscal measures, including a supplementary budget in the first half of the fiscal year starting in April [4][5] Market Reactions - Japanese stocks experienced a downturn following the GDP data release, while bond markets remained subdued [5] - Analysts suggest that the weak economic performance may lead to slower interest rate hikes by the Bank of Japan, as the economy struggles to gain momentum [6]

Core Viewpoint - The article discusses the upcoming leadership change at the Federal Reserve with Kevin Warsh nominated to replace Jerome Powell, highlighting the advice from Governor Stephen Miran on how Warsh should approach monetary policy during a critical economic period [1][3]. Group 1: Monetary Policy Approach - Miran advises Warsh to adopt a forward-looking perspective rather than a backward-looking one, emphasizing that being excessively focused on past data could lead to being behind the curve [2]. - Miran believes the current economic conditions do not warrant a strictly data-driven approach, which has characterized the Fed under Powell, suggesting that the time for data dependence is when there is significant uncertainty, which he does not perceive at present [5]. Group 2: Political Context and Challenges - Miran's appointment to the Fed by President Trump comes amid significant turmoil, including legal issues involving other Fed officials and investigations related to Powell [8]. - Warsh's nomination may face delays due to Republican opposition linked to the ongoing investigation into Powell, with Senator Thom Tillis indicating he will oppose Fed nominees until the investigation concludes [9]. - The hold placed by Tillis on Warsh's nomination could complicate the confirmation process, requiring a discharge vote in the Senate, which is challenging in a closely divided chamber [11].

Core Insights - The nomination of Kevin Warsh as Fed Chairman has initially reassured bond markets due to his experience and reputation as an inflation hawk, which reduces uncertainty in monetary policy [1] - A Warsh-led Fed is expected to focus on shrinking the balance sheet and potentially reducing forward guidance, which could increase bond market volatility even if rate cuts are still considered [1] Background - Kevin Warsh served as a Fed Governor from 2006 to 2011, a period that included the Financial Crisis and Great Recession, providing him with experience in both normal and emergency monetary policy [1] - His reputation as an inflation hawk and understanding of Fed independence are viewed positively by the markets [1] Potential Bond Market Impacts - A Warsh-led Fed may prioritize a smaller balance sheet, which involves more than just reducing Treasuries and MBS holdings; it also impacts funding markets [1] - The Fed's communication strategy may change under Warsh, potentially leading to increased volatility in the bond market due to less guidance [1] Next Steps - The confirmation process for Warsh is expected to proceed once the current political issues, such as the 'Powell subpoena' situation, are resolved [1]

Market Overview - U.S. stock futures showed volatility, with major indices mixed following a lower close on Thursday [1] - Investors are anticipating January's inflation data, with estimates suggesting core CPI may drop to 2.52%, aligning with pre-COVID averages [1] Treasury Yields - The 10-year Treasury bond yield is at 4.12%, while the two-year bond yield stands at 3.47% [2] - Market expectations indicate a 92.1% likelihood that the Federal Reserve will maintain current interest rates in March [2] Index Performance - Dow Jones decreased by 0.13%, S&P 500 increased by 0.02%, Nasdaq 100 rose by 0.13%, and Russell 2000 fell by 0.08% [3] Stocks in Focus - **Roku (ROKU)**: Long-term price trend remains strong, but short and medium-term trends are weak [3] - **Arista Networks (ANET)**: Strong price trend across short, medium, and long terms, with solid growth ranking [4] - **Tri Pointe Homes (TPH)**: Surged 25.79% after announcing a strategic combination with Sumitomo Forestry, maintaining a strong price trend [7] - **Expedia Group (EXPE)**: Dropped 4.97% after fourth-quarter earnings report, despite beating estimates; maintains a strong long-term trend but weak short and medium-term trends [8] - **HIVE Digital Technologies**: Weaker price trend across all time frames [5] Economic Insights - Scott Wren from Wells Fargo maintains a positive outlook for the U.S. economy, raising growth estimates to 2.9% [9] - Wren views market corrections as buying opportunities, emphasizing broadening performance beyond technology [10][11] Upcoming Economic Data - January's consumer price index data is set to be released at 8:30 a.m. ET [12] Commodities and Global Markets - Crude oil futures increased by 0.35% to approximately $63.06 per barrel [13] - Gold Spot price rose by 0.91% to around $4,966.59 per ounce [13] - Bitcoin traded 0.81% lower at $66,785.65 per coin [13] Corporate Earnings and Monetary Policy - Anticipation of a fourth consecutive year of record earnings for the S&P 500 [15] - Expectations for further Federal Reserve easing and rate cuts as the year progresses [15] - Preference for U.S. assets over international ones, particularly in sectors like Energy, Materials, and Industrials [15]