THE MACRO

The economy is doing fine and nobody trusts it.  Companies are borrowing money for 100 years while the Fed can't figure out the next 100 days. 

What’s really going on?

Most people think macro news is boring until it hits their wallet. Investors know the boring stuff is exactly what moves markets. Right now, we're in one of those weird moments where the data says one thing, the headlines scream another, and the market is trying to figure out which story is real. Inflation is stubborn but not scary. Jobs are resilient. Rates are high but mortgages are finally moving. The Fed is stable but might not be soon. None of this is clean or obvious, which is exactly why it matters. Markets don't crash when things are clearly bad. They get shaky when nobody can agree on what's happening next.

What’s Inside ⬇️ 

There’s a New Fed in Town
Rate Cuts Outlook
Google’s 100 Year Bond
What’s the 10 yr Yield Saying
Real Estate Market
Trump Accounts
The Biggest IPO Wave is Coming
Other Key Reports
 The Investors Lens

There’s a New Fed in Town

Trump picked Kevin Warsh to replace Jerome Powell in May. Warsh was a Fed governor under George W. Bush and should be more open to cutting rates. However, there's some drama...

Trump's Justice Department opened a criminal investigation into Powell over building renovation costs. Powell says it’s simply about political pressure to cut rates faster. Senate Democrats won’t hold confirmation hearings for Warsh until these investigations are dropped.

What this means for investors: This may be a time where the Fed is more political than independent. Faster rate cuts sound great, but are the decisions really based on economics? That could create uncertainty. Markets don't like uncertainty.

Rate Cuts Outlook

The Fed held rates steady in January. The rate is now 3.5% to 3.75%. Most experts think we'll see one or two more cuts in 2026, probably starting around June. The Fed doesn't see an urgent reason to cut right now. The economy is growing faster than expected, and inflation is still above their 2% target.

Here's what matters for investors: possibly fewer rate cuts than people hoped for. Markets had been pricing in three cuts. The bottom line is rates are staying higher for longer, which means borrowing costs stay higher, but it also means the economy is holding up pretty well.

Google’s 100 Year Bond

Google (Alphabet) just sold a 100-year bond, which is very rare. Let me explain: when you buy a bond, you're basically lending money to a company or government. They pay you interest every year, and at the end of the term, they pay you back your original money. A 100-year bond means Google is borrowing money and promising to pay it back in 2126. This is the first tech company to do this since Motorola in 1997. Google is doing this to fund their massive AI spending plans. They plan to spend up to $185 billion this year on AI infrastructure, which is double last years spend. Investors loved it.

For stock investors: Google can borrow money super cheap because investors trust them. That's good. But the massive AI spending has people worried.  Some people compare this to Motorola's 100 year bond right before they declined. It's a risk worth watching, but Motorola is not Google.  I’ll continue to ride with them.

What’s the 10 Year Yield Saying

The 10-year Treasury yield is at 4.15% to 4.25% right now. It's been pretty stable in January. It’s the market's guess about where interest rates and economic growth are headed. When the 10-year yield stays in this range, it's saying the economy is okay but not great. It's not screaming "recession" but it's also not saying "boom”. The yield dropped a bit recently after some weaker economic data on retail sales and jobs came out.

For stock investors, this matters because the 10-year yield affects everything from mortgage rates to how attractive stocks look compared to bonds. At about 4.2%, the S&P 500 has done well even though these yields have been a bit high, which shows companies are still making money. But if yields spike higher, stocks could struggle.

Real Estate Market

The 30-year fixed rate is down to 6.1%, which is the lowest it's been in years. This matters because when rates drop closer to 6%, more buyers come into the market. And that's exactly what's happening; both pending home sales and mortgage applications are up compared to last year. Home inventory is also growing, which is good news for buyers who have been dealing with few choices. New listings are coming on the market at a healthier pace than we've recently seen.

For investors, this is important because the housing market affects so much of the economy. When people buy homes, they also buy furniture, appliances, do renovations, all of which drive economic activity. The improving housing market is a sign the economy can handle these current interest rates. It also shows that even though rates aren't going back to the 2-3% days, life goes on and people adjust.

Trump Accounts

This is a major new government program that just launched. The government is giving $1,000 to every baby born between 2025 and 2028 to invest in the stock market.

Michael Dell and his wife pledged $6.25 billion to add another $250 for 25 million kids. Ray Dalio followed with $75 million for 300,000 kids in Connecticut. Companies like BlackRock, BNY, Uber, Intel, and Nvidia are matching the $1,000 for their employees' kids.

My Take: This is one of the biggest wealth-building initiatives the government has ever done and it's designed to get more Americans investing in stocks from birth. A permanent program like this is what’s needed to alleviate social security concerns and keep more money in people’s pockets from their paychecks.

The Biggest IPO Wave is Coming

2026 could see the biggest IPO wave in history. SpaceX is targeting an $800 billion to $1.5 trillion valuation. OpenAI is aiming for $500 billion to $1 trillion. Anthropic (makers of Claude AI) is looking at $300-350 billion. Databricks is at $134 billion. If these all go public, we're talking about $1.4 trillion in new market value and $700 billion returned to venture capital investors. This is likely the biggest liquidity event in venture capital history.

Other Key Reports

➡️ The Jobs Report – The good news is there are more people working at one time than there has ever been in the U.S (est $164 million).  Full time employees are also more than there ever has been in the U.S. (est. $135 million). Today’s report showed 130k jobs were added in January, bringing the unemployment rate down to 43.%.
➡️ The Consumer Price Index (CPI) and The Producer Price Index (PPI) report will be released this Friday.  Last month CPI stayed stable at 2.7% inflation YOY.
➡️ 2025 Q4 GDP Report – To be reported 2/20/2026

The Investor Lens

Here's the big picture for long-term investors: The economy is doing okay, and growth is solid. The Fed is being very careful. The drama around Fed leadership is worth watching but probably won't change much in the short term. Markets have been resilient even with this uncertainty. Companies are spending huge amounts on AI, which is exciting but also risky. Not every AI bet will pay off. Real estate is stabilizing, which is healthy.

My view: stay invested but be prepared for some volatility this year. We're in a weird period where the economy is pretty good but everyone's nervous about politics, tariffs, Fed independence, and whether AI spending makes sense. That combination creates uncertainty. But as long as companies keep making money and the economy keeps growing, stocks can handle interest rates higher for longer periods. Don't try to time the market based on what the Fed might do next. Focus on quality companies with sound balance sheets. Stay Long!