As the race for the next Federal Reserve Chair heats up, BlackRock's Rick Rieder has suddenly emerged as the new frontrunner on prediction markets to lead the central bank. And if President Trump does tap Rieder for the role, it could be a huge moment for the crypto industry, as BlackRock's chief investment officer for global fixed income isn't just a "crypto curious" but an outspoken advocate for the digital assets. In fact, he might be a bitcoin bull. He said as far back as 2020 — in much earlier day ...

Quick Read Average American cardholder owes $7,886 with credit card interest rates near 23%. Issuer margins prevent Fed rate cuts from lowering credit card APRs for consumers. Minimum payments of 1-3% go mostly to interest, requiring decades to eliminate balances. Investors rethink ‘hands off’ investing and decide to start making real money Credit card debt has reached crisis levels, with the average American cardholder now owing $7,886. When combined with interest rates near 23%, this creates a ...

Group 1 - The Canadian dollar continues to experience a range-bound trading pattern, influenced by its commodity currency characteristics, the monetary policy dynamics between Canada and the U.S., and trade uncertainties, resulting in a slight strengthening against the U.S. dollar while remaining within a volatile range since the beginning of the year [1] - The Bank of Canada has maintained its benchmark interest rate at 2.25%, with a 75% market expectation that rates will remain stable throughout 2026, indicating a conclusion to the rate-cutting cycle, which provides a foundational support for the Canadian dollar [1] - The U.S. Federal Reserve exhibits a "hawkish but still accommodative" stance, with rate cut expectations pushed to June, but a projected reduction of 54 basis points within the year, leading to a narrowing interest rate differential that weakens the relative advantage of the U.S. dollar [1] Group 2 - The Canadian dollar, being an energy-export-oriented currency, is closely tied to international oil prices, with recent geopolitical risks supporting oil price stabilization, thus improving expectations for Canadian crude oil export revenues [2] - However, medium to long-term oil prices are pressured by expectations of global oversupply, leading to a decline in oil prices since the beginning of the year, which has previously caused significant depreciation of the Canadian dollar [2] - Domestic economic recovery in Canada is insufficient, with the unemployment rate projected to rise to 6.8% by December 2025, the highest level outside of the pandemic, and declining consumer confidence impacting corporate investment [2] Group 3 - The technical indicators show that the USD/CAD pair is in a bearish trend, with the price recently breaking below the key psychological level of 1.3700 and testing new lows [3] - The Relative Strength Index (RSI) is in a neutral to low range, indicating potential for further downward movement, while the MACD remains in a bearish state, suggesting a continuation of the downtrend [3] - Key pivot points for the USD/CAD pair are identified, with resistance levels between 1.3729-1.3762 and support levels at 1.3670-1.3650, indicating a need to monitor these critical levels for potential price movements [3]

Core Insights - The Federal Reserve is expected to keep interest rates unchanged in its upcoming meeting, marking a pause after three consecutive rate cuts totaling 0.75 percentage points [1][2]. Economic Context - Inflation remains a significant concern, with the latest Consumer Price Index indicating a rate of 2.7%, above the Fed's target of 2%, which contributes to the cautious approach of policymakers [3]. Market Expectations - Markets currently estimate a 60% chance of a quarter-point rate cut by the Fed's June meeting, although these predictions are subject to rapid changes based on economic data [4]. Savings Rates - Savings account rates typically do not fluctuate significantly during Fed pauses, as banks often wait for clearer signals before adjusting rates [6]. - Despite recent rate cuts, competitive pressures have kept the best savings account yields historically high, ranging from 4% to as high as 5% [7][8]. Certificates of Deposit (CDs) - CD rates tend to respond differently than savings account rates, often adjusting in anticipation of Fed moves. Current top CD rates are around 4.50% APY [9][11]. - Timing is crucial for savers considering CDs, as locking in a competitive rate sooner can provide certainty against potential future rate adjustments [12].

Economic Indicators - The dollar index (DXY00) fell by -0.42% due to a stock rally that reduced liquidity demand for the dollar and euro strength following eased European tensions [1] - US weekly initial unemployment claims rose by +1,000 to 200,000, indicating a stronger labor market than the expected 209,000 [2] - Q3 GDP was revised upward by 0.1 to 4.4% (quarter-over-quarter annualized), surpassing expectations of no change at 4.3% [3] - November personal spending increased by +0.5% month-over-month, aligning with expectations, while personal income rose by +0.3% month-over-month, below the expected +0.4% [3] - The November core PCE price index rose by +0.2% month-over-month and +2.8% year-over-year, meeting expectations [3] Market Reactions - The euro (EUR/USD) rose by +0.54% amid dollar weakness, supported by President Trump's decision to refrain from imposing tariffs on European nations opposing his Greenland acquisition efforts [7] - The Eurozone January consumer confidence index rose more than expected to an 11-month high, contributing to the euro's gains [7] Federal Reserve and Interest Rates - The Federal Open Market Committee (FOMC) is expected to cut interest rates by about -50 basis points in 2026, while the Bank of Japan (BOJ) is anticipated to raise rates by +25 basis points in the same year [5] - The dollar is under pressure as the Fed increases liquidity in the financial system, having started purchasing $40 billion a month in T-bills since mid-December [6] - Concerns exist regarding President Trump's potential appointment of a dovish Fed Chair, which could negatively impact the dollar [6]

Group 1 - Policymakers are expected to maintain the federal funds rate between 3.5% and 3.75% after the upcoming meeting, with traders anticipating one to two quarter-point reductions this year [3] - The core consumer price index rose by 0.2% in December and 2.6% for the entire year, matching a four-year low [4] - The Federal Reserve's preferred inflation measure is projected to fall below the 3% forecast for 2025, with the personal consumption expenditures price index (excluding food and energy) rising by 2.8% in November [6] Group 2 - President Trump has been advocating for more significant interest rate cuts, suggesting a reduction to as low as 1%, claiming that current rates hinder economic success [5] - The Beige Book report indicates moderate price growth across most of the Fed's districts, with only two districts reporting slight price increases [5][6] - Economic analysts expect inflation to continue to undershoot the Federal Open Market Committee's expectations this year due to low tariff revenues and signs of slowing wage growth [6]

Economic Indicators - The dollar index (DXY00) is down by -0.28%, with a stock rally reducing liquidity demand for the dollar [1] - US Q3 GDP was revised upward by 0.1 to 4.4% (q/q annualized), exceeding expectations of no change at 4.3% [2] - US weekly initial unemployment claims rose by +1,000 to 200,000, indicating a stronger labor market than the expected 209,000 [1] - US Nov personal spending increased by +0.5% m/m, aligning with expectations, while personal income rose by +0.3% m/m, below the expected +0.4% [2] - The US Nov core PCE price index rose by +0.2% m/m and +2.8% y/y, meeting expectations [2] Monetary Policy and Market Reactions - The Federal Open Market Committee (FOMC) is anticipated to cut interest rates by about -50 bp in 2026, contributing to dollar weakness [4] - The Fed has begun purchasing $40 billion a month in T-bills, increasing liquidity in the financial system, which is also pressuring the dollar [5] - Markets are pricing in a 5% chance of a -25 bp rate cut at the FOMC's next meeting on January 27-28 [3] Currency Movements - The euro (EUR/USD) is up by +0.34%, benefiting from dollar weakness and support from President Trump's decision to refrain from imposing tariffs on European nations [6] - The Eurozone Jan consumer confidence index rose more than expected to an 11-month high, further supporting the euro [6]

Core Viewpoint - The current high valuations of mega-cap tech stocks, such as NVIDIA at 46x earnings, make mid-cap value stocks an attractive alternative for investors seeking lower-risk opportunities [2][3]. Performance Overview - The SPDR S&P 400 Mid-Cap Value ETF (MDYV) has delivered an 11% gain over the past year and a 69% return over the last five years, indicating a significant valuation gap compared to the Nasdaq-100's 98% return during the same period [3][5]. - The fund's performance suggests that mid-cap value stocks have been overlooked as investors have focused on mega-cap tech [3]. Fund Characteristics - MDYV is priced at $89 per share with a 0.15% expense ratio, providing access to nearly 300 mid-cap companies that trade at lower multiples compared to big tech [4]. - The fund allocates 26% to financials and 19% to industrials, making it sensitive to interest rate changes [5][7]. Interest Rate Impact - The trajectory of interest rates is identified as the most significant factor influencing MDYV's performance over the next 12 months, particularly due to its heavy allocation in financials [7]. - Rising interest rates could benefit MDYV's financial holdings by expanding net interest margins, while falling rates could negatively impact these sectors [7][8]. Competitive Comparison - The Vanguard Mid Cap Value ETF (VOE) charges a lower expense ratio of 0.07% and offers a yield of 2.1%, with a turnover rate of 19% compared to MDYV's 37% [5].

Economic Outlook - The US economy is demonstrating "resilience," with Minneapolis Fed President Neel Kashkari indicating no current impetus for the Fed to cut interest rates this month [1] - The November PPI final demand increased by 3.0% year-over-year, surpassing expectations of 2.7% [1] - The dollar found support from stronger-than-expected US economic data, including retail sales and producer prices [1] Federal Reserve Insights - The Fed Beige Book reported a slight to modest pace of economic activity growth across most regions since mid-November, marking an improvement from previous reports [2] - Philadelphia Fed President Anna Paulson anticipates inflation moderating and growth around 2% this year, suggesting modest rate adjustments may be appropriate later in the year [3] - Markets are currently pricing in a 5% chance of a 25 basis point rate cut at the upcoming FOMC meeting on January 27-28 [3] Currency Market Dynamics - The dollar index fell by 0.03% on Wednesday, pressured by a rally in the yen and concerns regarding Fed independence [2] - The dollar is expected to face ongoing weakness as the FOMC is projected to cut interest rates by approximately 50 basis points in 2026 [4] - The dollar is under pressure due to increased liquidity measures by the Fed, including a $40 billion monthly purchase of T-bills [5] Precious Metals Market - Precious metals, including gold and silver, surged due to rising tensions in Iran and safe-haven demand, with gold reaching an all-time high of $4,635.00 per ounce [11][12] - Strong central bank demand for gold is evident, with China's PBOC reserves increasing by 30,000 ounces to 74.15 million troy ounces in December [17] - Fund demand for precious metals remains robust, with gold and silver ETF holdings reaching multi-year highs [18]

Core Insights - Home equity lines of credit (HELOCs) and home equity loans (HELs) have seen a significant drop in interest rates, now averaging around 7.5% or lower, making them more affordable than in recent years [1][2] Interest Rates Overview - The national average HELOC rate is currently 7.25%, down 19 basis points from the previous month, while the average home equity loan rate is 7.56%, a decrease of three basis points [2] - These rates are applicable to applicants with a minimum credit score of 780 and a maximum combined loan-to-value ratio (CLTV) of 70% [2] Home Equity Value - Homeowners have a record amount of equity tied up in their homes, totaling nearly $36 trillion at the end of Q2 2025, the highest ever reported [3] - With mortgage rates around 6%, homeowners are likely to retain their low-rate primary mortgages, making selling less appealing [3] Alternative Financing Options - Accessing home equity through second mortgages like HELOCs or HELs is presented as a viable alternative for homeowners [4] Pricing Mechanism - Home equity interest rates differ from primary mortgage rates, being based on an index rate plus a margin, with the current prime rate at 6.75% [5] - Lenders have flexibility in pricing second mortgage products, and rates can vary based on credit score, existing debt, and the credit line relative to home value [6] Lender Comparison - It is advisable for borrowers to shop around for the best rates and terms, as average national HELOC rates may include introductory rates that can change after a set period [6][9] - The best HELOC lenders typically offer low fees, fixed-rate options, and generous credit lines, allowing homeowners to utilize their equity flexibly [8] Current Offers - FourLeaf Credit Union is currently offering a HELOC rate of 5.99% for the first 12 months on lines up to $500,000, which will convert to a variable rate of 7.25% thereafter [9] Payment Structure - For a $50,000 HELOC at a 7.50% interest rate, the monthly payment during the 10-year draw period would be approximately $313, but the variable nature of the rate means payments may increase during the repayment period [13]