Gregory Daco

💳Credit cards were running hot during the holiday season... not income...

Interesting chart using LLM to filter through Warsh’s speeches, transcripts, media interviews, papers, etc. ⤵️

🤯 Assuming these 4 hyperscalers' follow through on this expected $250bn increase in capex, and that only one fourth is pure domestic activity (i.e. 75% is offset by imports), that would lead to a 0.2% GDP boost in 2026!

Four of the biggest US technology companies together have forecast capital expenditures that will reach about $650 billion in 2026 — a mind-boggling tide of cash earmarked for new data centers and all the gear housed within them.

www.bloomberg.com/news/article...

Gliding along the pre-pandemic Beveridge curve -- points to likely further increases in the #unemployment rate in 2026

⚠️Bank of England voted 5–4 to maintain Bank Rate at 3.75% with easing bias

"Risk from greater inflation persistence has continued to become less pronounced while some risks to inflation from weaker demand & loosening labour market remain...
Bank Rate likely to be reduced further"

BESSENT SAYS IF TRUMP WINS IRS SUIT, $10B WOULD COME FROM TAXPAYERS

⚠️Only 0.87 job opening per unemployed -- lowest since 2017.

❄️Deep freeze

🔼Hiring rate: 3.3% (+0.1pt) 🆚 4.3% pre-Covid

↔️Quits rate: 2.0% (flat) 🆚 2.6% pre-Covid

🔻Openings rate: 3.9% (-0.3pt) 🆚 4.5% pre-Covid

🇺🇸December #JOLTS: US labor market is weakening with low hiring, low openings & layoffs trending higher (though not surging)

🔻Job openings: 6.5mn (-386k): post Covid low

🔼Hiring: 5.3mn (+172k): near post-Covid low

🔼Quits: 3.2mn (+1k): 7-mo high

🔺Layoff: 1.8mn (+61k)

#Fed Governor Waller a few days ago: "I have heard in multiple outreach meetings of planned layoffs in 2026. This indicates to me that there is considerable doubt about future employment growth and suggests that a substantial deterioration in the labor market is a significant risk."

💡Reasons for the layoff announcements:

1️⃣ Contract Loss: 28%
2️⃣ Market and Economic Conditions: 26%
3️⃣ Restructuring: 18%
4️⃣ Closings: 12%
5️⃣ AI: 7%

🚨 Challenger, Gray & Christmas: 108k #job cut announcements in January

⛔+205% m/m
⛔+118% y/y
⛔Highest January since 2009
⚠️Transportation (led by UPS), Tech (led by Amazon), & Healthcare (Medicaid/Medicare) led the cut announcements

Labor market in deep freeze

▶️Continuing claims remain well behaved: Down about 5% from last November

▶️Despite a historically low hiring rate & record hiring layoff announcements, we're not seeing a surge in claims

▶️Historical negative supply shock & softening labor demand

US Initial claims for #unemployment jumped higher in week-ended January 31, 2026.

Nothing alarming, but noteworthy after seasonal decline at the end of 2025 -- could be related to 🥶winter storm🌨️ across most of the country.

📉Claims: 221k (+22k)
📉4-wk avg: 212k (+6k)

⚠️ECB holds key rates steady

1️⃣ Assessment reconfirms that inflation should stabilise at 2% target in the medium term

2️⃣ Economy remains resilient in a challenging global environment

3️⃣ Outlook is still uncertain ➡️trade policy uncertainty & geopolitical tensions

#Fed Governor Lisa D. Cook suggesting steady policy

"I see risks as tilted toward higher inflation... I supported the FOMC's decision to hold the policy rate steady... until I see stronger evidence that inflation is moving sustainably...to target, that is where my focus will be"

Clean and comfortable 🩵 heading to Wembley!

Margin leadership: strategic architecture of the top 5% Margin resilience depends on a strategic architecture that empowers businesses to thrive amid volatility and uncertainty. Learn more.

📊 In a new EY-Parthenon article, “Margin resilience: The strategic architecture of the top 10%,” we examine how a small group of US companies consistently delivers top-quartile margins across cycles — even as volatility intensifies.

www.ey.com/en_us/insigh...

“Job creation took a step back in 2025, with private employers adding 398,000 jobs, down from 771,000 in 2024,” said Dr. Nela Richardson, chief economist, ADP

Soft advance in US private sector employment: +22k via @ADP in January

Key insights:
🔶Modest gain led by mid-sized businesses
🔻Prof & business services, info, manufacturing
✅Healthcare, finance, construction
🔶3-mo average soft +44k
🔶Post-revision trend is concerning⤵️

US Shutdown Ends as Trump Signs His Funding Deal With Democrats The partial US government shutdown ended late Tuesday after President Donald Trump signed into law a funding deal he negotiated with Senate Democrats, overcoming opposition from both ends of the polit...

The partial US government shutdown ended Tuesday after Donald Trump signed into law a funding deal he negotiated with Senate Democrats www.bloomberg.com/news/article...

Fed Governor Stephen Miran Steps Down From White House CEA Role Federal Reserve Governor Stephen Miran has stepped down from his post leading the Council of Economic Advisers, according to a White House official.

Federal Reserve Governor Stephen Miran has stepped down from his post leading the Council of Economic Advisers, according to a White House official.

www.bloomberg.com/news/article...

"I imagine some finance teams have done well recently (at least based on the increases I’ve seen in my streaming services and homeowners insurance)..."

Tom Barkin
President, Federal Reserve Bank of Richmond

U.S. Economy: The Road Ahead President Tom Barkin shares his views on today’s economy and the path ahead.

January #inflation story

"Sales & finance teams are debating how aggressively to increase prices... Sales doesn’t want to pass through those costs at the risk of lost volume; finance doesn’t want to eat the cost at the risk of reduced margins..."

www.richmondfed.org/press_room/s...

The January 2026 Senior Loan Officer Opinion Survey on Bank Lending Practices The Federal Reserve Board of Governors in Washington DC.

Fed loan officer survey 2026 outlook: "Significant net shares of banks reported expecting deteriorations in credit quality for credit card and auto loans to nonprime borrowers, and a modest net share of banks reported expecting so for auto loans to prime borrowers."

The December Job Openings and Labor Turnover Survey, which was scheduled to be released Tuesday, will also be rescheduled.

January Jobs Report Will Be Delayed Due to Shutdown, BLS Says The Bureau of Labor Statistics will not release the January jobs report on Friday as scheduled due to the partial government shutdown.

www.bloomberg.com/news/article...

Warsh Has Promised More Than He Can or Should Deliver Kevin Warsh, the presumptive new chair of the Federal Reserve, has a lot going for him: experience at the Fed during the 2008 financial crisis; market savvy honed at Morgan Stanley and more than a dec...

Kevin Warsh has already made his new job very difficult, says former New York Fed President Bill Dudley www.bloomberg.com/opinion/arti...

☹️Hope is not a strategy

▶️"Confused & uninformed tariff policies continue to plague small companies, making long-term planning pointless"
▶️"Business conditions remain soft as we continue to miss sales, orders & profits as result of increased costs from tariffs"
▶️"...despite beneficial tax policies"