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Happening Now
Market Week: February 2, 2026
Equities ended the week mostly lower as investors parsed through a heavy slate of fourth-quarter earnings data, economic reports, high valuations, and the Federal Reserve’s decision to maintain interest rates at their current levels.
Dueling Mandates: The Fed’s Policy Caution and Treasury’s Growing Borrowing Needs | Weekly Market Commentary | February 2, 2026
The Federal Reserve (Fed) enters 2026 navigating potentially constrained policy conditions as resilient growth and above‑trend inflation intersect with an increasingly unsustainable fiscal trajectory. Fed Chair Jerome Powell emphasized that federal debt growth requires eventual corrective action, even if near‑term market risks remain limited. Rising primary deficits at near full employment further limit long‑run policy flexibility, while expanding Treasury financing needs — and a growing reliance on short‑duration bills — heighten rollover risk and amplify sensitivity to the Fed’s policy rate.
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