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Core Insights - Deposit account rates are declining, but competitive returns on certificates of deposit (CDs) can still be locked in, with the best CDs offering rates above 4% [1] Group 1: Current CD Rates - The best short-term CDs (six to 12 months) currently offer rates around 4% APY, with Marcus by Goldman Sachs providing the highest rate of 4% APY on its 1-year CD as of February 3, 2026 [2] - CDs generally offer significantly higher rates than traditional savings accounts, making them an attractive option for savers [2] Group 2: Historical Trends - CD rates were relatively high in the early 2000s but began to decline due to economic slowdowns and Federal Reserve rate cuts, with average one-year CDs at around 1% APY by 2009 [3] - The trend of falling CD rates continued into the 2010s, with average rates for 6-month CDs dropping to about 0.1% APY by 2013 [4] - A slight improvement in CD rates occurred between 2015 and 2018 as the Fed gradually increased rates, but the COVID-19 pandemic led to emergency rate cuts, causing new record lows in CD rates [5] Group 3: Recent Developments - Following the pandemic, inflation prompted the Fed to hike rates 11 times between March 2022 and July 2023, resulting in higher APYs on savings products, including CDs [6] - As of September 2024, the Fed began cutting the federal funds rate, leading to a steady decline in CD rates from their peak, although they remain high by historical standards [7] Group 4: Understanding CD Rates - Traditionally, longer-term CDs offered higher interest rates, but the current highest average CD rate is for a 12-month term, indicating a flattening or inversion of the yield curve [8] - When choosing a CD, factors such as goals, type of financial institution, account terms, and inflation should be considered to ensure the best fit for individual needs [9]

Group 1 - Consumer prices increased by 0.4% in January compared to the same month last year, indicating a slowdown from December's 0.7% increase [1]

Summary of the U.S. Consumer Pulse Survey: AI Use in the Spotlight Industry Overview - **Industry**: U.S. Consumer Behavior and AI Adoption - **Survey Period**: January 22nd - January 26th, 2026 - **Sample Size**: Approximately 2,000 consumers in the U.S. Key Findings on AI Usage - **AI Adoption**: - 75% of respondents use AI for personal reasons at least rarely, while 72% use it for work-related activities [5][6] - Over half of the respondents use AI at least monthly for both personal and professional purposes [6] - 38% use AI to learn about new topics for personal purposes, and 64% for writing, editing, or summarizing text at work [5][14] - **Demographic Insights**: - Younger consumers (ages 25-34) are the most frequent users of AI, with 28% using it daily for personal purposes and 28% for work [9][10] - 41% of respondents aged 55 and older report never using AI for personal purposes [9] Consumer Spending Outlook - **Post-Holiday Spending**: - 29% of consumers expect to spend more next month, while 17% expect to spend less, resulting in a net spending outlook of +12%, down from +22% in November [5][30] - Expected spending on toys is projected to drop by 18%, and apparel by 7% [5][30] - **Inflation Concerns**: - 53% of consumers are concerned about rising prices, a decrease from 57% in the previous survey [31][30] - Inflation remains the top concern for low and middle-income respondents, while higher-income respondents are more concerned about the political environment [31][36] Consumer Confidence and Economic Outlook - **Economic Sentiment**: - 36% of consumers expect the economy to improve in the next six months, while 42% expect it to worsen, yielding a net score of -6% [30][55] - The outlook for household finances has improved, with a net score of +22%, up from +12% in the previous wave [30][58] Travel Intentions - **Travel Plans**: - 60% of consumers plan to travel in the next six months, an increase from 58% in the previous wave [30][95] - Visiting friends and family is the most common reason for travel, cited by 65% of travelers [30][95] Additional Insights - **Consumer Engagement**: - Participation in out-of-home activities remains consistent, with 67% dining out, although the net engagement outlook is trending negative at -9% [86] - Online shopping remains prevalent, with 64% purchasing non-grocery items online [91] Conclusion The survey indicates a significant adoption of AI among U.S. consumers, with notable differences in usage patterns across demographics. Consumer spending outlook shows a seasonal decline post-holidays, with inflation concerns still prevalent. Economic sentiment is cautiously optimistic, particularly regarding household finances and travel intentions.

Summary of Morgan Stanley Global Macro Forum Call Industry and Company Involvement - The call involves insights from Morgan Stanley's Global Macro Strategy team, focusing on macroeconomic trends and financial markets, particularly in the US and Japan. Core Insights and Arguments - **Fed Outlook**: Kevin Warsh's nomination does not significantly change the Federal Reserve's outlook. Two additional rate cuts are expected in the second half of the year due to disinflation, with gradual changes likely under a Warsh-led Fed, primarily through balance sheet policy rather than interest rates [39][39][39]. - **Yield Curve Dynamics**: A smaller Fed footprint in communications and balance sheet management is anticipated to steepen the yield curve. Investor speculation regarding the Fed's intentions may influence the swap spread curve [39][39][39]. - **JGB Yield Forecast**: The forecast for Japanese Government Bonds (JGB) yields has been revised higher due to an improved US growth outlook and changes in the Bank of Japan's (BoJ) stance. A bear-steepening trend is expected as the BoJ gradually hikes rates, with persistent weak supply/demand dynamics in the 10-year plus sector [39][39][39]. - **US Rates Volatility**: US rates volatility has decreased due to low realized volatility and a surge in callable bond issuance. A near-term rebound is possible due to a two-week issuance gap around the Chinese New Year, with reduced demand from Chinese banks for supranational callables [39][39][39]. - **FX Volatility**: The increase in FX volatility appears isolated, indicating FX-specific risks rather than broader macroeconomic risks. The USD risk premium remains elevated, but medium-term risks to the USD are high. A bullish stance is maintained on risk assets, particularly AUD, CAD, EM FX, and SEK [39][39][39]. Other Important Points - **Volatility Trends**: Rates volatility has not increased alongside FX volatility, with the VIX remaining stable despite higher FX volatility [30][30][30]. - **Short USD Positioning**: There has been a reduction in short USD positioning, while USD risk premia have returned to levels seen in Q2 2025 [32][35][35]. - **Market Dynamics**: The dynamics between the 10-year and shorter-term sectors are driven more by inflation concerns than fiscal concerns, with the 2-year and 10-year term premiums trading in parallel [14][14][14]. This summary encapsulates the key points discussed during the Morgan Stanley Global Macro Forum, highlighting the macroeconomic outlook, interest rate expectations, and market dynamics in both the US and Japan.

Global Markets Research US Economic Weekly 30 January 2026 President Trump has nominated former Fed Governor Kevin Warsh to be Powell's replacement as chair. We expect Warsh will be dovish in the near term as Fed chair, with political pressure to maintain easy financial conditions outweighing his long-held hawkish views. Economics - North America Warsh Case Scenario Trump nominates Kevin Warsh as next Fed Chair Warsh is not a Trump insider, which reduces the likelihood that he will push for the drastic rate ...

Investment Rating - The report does not explicitly provide an investment rating for the industry. Core Insights - The focus in private markets has shifted from interest rates and inflation to tariffs and trade policies, which have reached levels not seen in a century, increasing operational and investment risks for funds [4][33] - Fundraising sentiment is stable but demanding, with capital flowing towards large platforms or niche managers, while those in the middle face tougher conditions [5] - AI adoption in private markets has accelerated, with nearly all firms exploring AI tools, although governance and clear policies are still lacking [6][116] Macro - The federal funds rate is expected to decrease, with market pricing indicating two cuts by year-end and another two next year, although inflation concerns may affect borrowing costs [19][21] - The effective US tariff rate has risen significantly, impacting private markets and leading funds to manage FX risk through increased hedging [33][36] Private Market Trends - Fundraising has returned to pre-pandemic levels, but there is a split in capital flow, with large and niche funds performing better than mid-sized funds [5][52] - Investors expect moderate growth in AUM, with nearly 70% anticipating an increase of 10% or more over the next 12 months [62] - The fundraising environment is characterized by a bifurcation, where large funds are aggregating capital while niche funds succeed through sectoral expertise [63] Spotlight: AI and Firm Operations - The era of AI hesitation has ended, with most firms now exploring AI tools, although implementation remains a challenge [116] - Firms are focusing on building data infrastructure to maximize the benefits of AI, as many lack the necessary data foundation [117][118] - AI tools are primarily being used in areas where junior staff work, but hiring for junior positions remains strong as firms view AI as a complement rather than a replacement [129][130]

Group 1: Market Reactions - An index fund tracking Indian shares, the $9.4 billion iShares MSCI India ETF, experienced its largest gain since May, attributed to a trade deal with the US that will lower tariffs on Indian goods from 25% to 18% [1] - MSCI's gauge for developing-nation equities fell by as much as 2.9%, marking the most significant decline since April, while South Korean stocks saw a notable drop with the Kospi index down 5.3% [2] - The overall market selloff was influenced by a dramatic decline in various asset classes, including global equities and precious metals, following President Trump's nomination of Kevin Warsh to lead the Federal Reserve, which strengthened the dollar [3] Group 2: Currency and Bond Markets - MSCI's gauge for currencies decreased by approximately 0.4%, with the South Korean won underperforming, while Latin American currencies, particularly the Colombian peso, outperformed after a 100-basis point rate hike by the Colombian central bank [4] - Morgan Stanley strategists indicated that Trump's nomination of Warsh does not signify the end of the rally in emerging-market currencies and local bond markets, suggesting that investors should consider buying dips due to solid fundamentals [6] - Poland is planning a return to the Japanese bond market with a multi-tranche Samurai issue to meet its increasing borrowing needs, while Argentina is opting not to sell bonds in global markets due to access to alternative funding sources at lower interest rates [8]

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **oil market** and the geopolitical implications of tensions between the **US and Iran**. The analysis considers various scenarios regarding Iran's nuclear capabilities and the potential for conflict or negotiation. Core Insights and Arguments - **Geopolitical Tensions**: The US is increasing military presence in the Middle East while engaging in negotiations with Iran. The expectation is that the US will take actions to limit Iran's nuclear and missile capabilities without provoking a disproportionate response from Iran, which is currently facing economic challenges and civil unrest [1][7][10]. - **Base Case Scenario**: The most likely outcome (70% probability) is that US and Israeli actions will be limited, avoiding escalation. This includes potential oil tanker seizures and maintaining sanctions pressure, which will keep the geopolitical risk premium in oil markets elevated [2][33]. - **Future Projections**: By November 2026, it is anticipated that a US-Iran deal may emerge, leading to a reduction in the geopolitical risk premium associated with Iranian oil, currently estimated at $7-10 per barrel [4][26]. - **Oil Market Dynamics**: Iran produces approximately **5 million barrels per day (b/d)**, accounting for **4% of global supply** and **5% of global oil trade flows**. Disruptions in Iranian oil exports could significantly impact global oil prices and markets, particularly through the **Strait of Hormuz**, which handles over **20 million b/d** of oil, representing more than **20% of global petroleum liquids supply** [10][11]. - **Potential Outcomes**: Various scenarios are outlined, including: - A full blockade of Iranian exports (15% probability) - Continuation of current strategies (10% probability) - Intensive military action targeting Iranian leadership (5% probability) [2][34]. Additional Important Insights - **Economic Context**: The US administration is sensitive to oil prices due to their impact on domestic political economy, particularly as inflation remains a key issue for voters [10][15]. - **Iran's Internal Situation**: The Iranian economy is struggling, with high inflation and civil unrest, which may increase the likelihood of a leadership change that could facilitate negotiations with the US [9][15]. - **Market Reactions**: Historical data suggests that spikes in geopolitical risks often lead to short-lived market impacts, with oil price fluctuations providing buying opportunities for risk assets [24]. - **Inflationary Impacts**: The report indicates that the disinflationary effects of low oil prices may be diminishing, suggesting a potential shift towards inflationary pressures as geopolitical risks in oil markets remain elevated [25]. - **Long-term Outlook**: The report emphasizes that the US may prefer to maintain the status quo until a favorable opportunity for a deal arises, with civil unrest in Iran posing the greatest risk for oil supply disruptions [15][37]. This summary encapsulates the critical insights and projections regarding the oil market and geopolitical dynamics involving the US and Iran, highlighting potential investment opportunities and risks.

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the economic outlook for the US, Euro area, and Asia/EM regions, focusing on monetary policy, inflation, and GDP growth forecasts. Core Points and Arguments US Economic Outlook - The FOMC maintained the federal funds rate at 3.5-3.75% in a split decision of 10-2, aligning with consensus expectations [4] - Anticipation of two 25 basis point cuts in June and September, potentially lowering the rate to 3-3.25% [5] - Better growth news and signs of labor market stabilization suggest the FOMC is positioned to hold rates steady while assessing incoming data [5] - Q4 GDP tracking estimate was lowered by 0.4 percentage points to +2.0%, influenced by a 5.3% increase in durable goods orders and a widening trade deficit [5] Euro Area Economic Outlook - Euro area real GDP increased by 0.3% in Q4, surpassing expectations [6] - Inflation in January was slightly above expectations in Spain (2.5% YoY) and Germany (2.13% YoY), leading to an upgrade in the Euro area headline inflation forecast to 1.77% YoY [6] - The ECB is expected to maintain its policy rate at 2% for the foreseeable future, with no major changes anticipated in the upcoming meeting [6] Asia/EM Economic Outlook - The Bank of Japan kept its policy rate unchanged at 0.75%, with expectations for a rate hike in July [10] - The Riksbank maintained its policy rate at 1.75%, signaling stability until at least the second half of 2027 [8] - Client sentiment from a Global Macro Conference indicated increased optimism about the global economy, with a preference for EM equities, particularly in China and Korea/Taiwan [8] Additional Important Insights - The potential removal of US tariffs could lead to significant changes in trade flows and consumer prices, as evidenced by the experience in Canada [4] - The labor market remains a critical uncertainty in the economic outlook, with expected net job losses in AI-exposed industries [5] - Geopolitical developments are ranked as the highest risk concern among clients [10] Conclusion - The economic outlook across the US, Euro area, and Asia/EM regions shows cautious optimism, with central banks maintaining current rates while monitoring inflation and growth indicators. The potential for tariff changes and labor market dynamics are key factors to watch in the coming months.