January 2026
While we’re only one month into 2025, January has felt more like an entire year given the market volatility and social unrest witnessed during the month.
President Trump’s action during month, namely the capture and incarceration of Venezuela’s President Madura and his wife caused quite a stir especially since the President at one point suggested he was the acting President of Venezuela. In Minnesota two individuals were killed by ICE agents in separate incidents promoting anti-ICE protests resulting in a new Bruce Springsteen recording detailing the incidences. In some ways it feels very much like the anti-Vietnam protests of the 1960’s.
Also, during the month, the Trump administration seemed to backpedal on taking Fannie Mae and Freddie Mac public. On several occasions during the fourth quarter of last year the administration had explicitly said that they would like to release the agencies from government control through an initial public offering. But reacting to criticism that buying a home is unaffordable, Trump ordered Fannie and Freddie to buy $200 Billion in secondary mortgages with the goal of driving down mortgage rates. The market responded accordingly with the spread between Mortgage and Treasury rates narrowing by about 10 basis points. However, if the two are free of government control the President can’t order them act as he wishes.
Economic data for January was mixed as evident in the consumer confidence surveys. The Conference Board’s measure of consumer confidence fell to 84.5, the lowest level since 2014, contradicting the University of Michigan expectations index which showed an uptick, illustrating the fickle nature of consumer surveys. The January employment report registered a surprise gain of 130,000 new jobs in the month, though there is some speculation that the seasonal adjustment may have played an outsized role in the gain.
Corporate bond issuance in the first month of the year is almost always heavy and January 2026 was no exception, with $239.4 Billion of corporate debt brought to market, 2.5% more than January 2025, according to SIFMA.
Despite the heavy issuance, the bond market was well behaved with the 2-year note trading in a relatively narrow range of 3.45% and 3.61% while the 2-year/30-year yield curve closed at 134 basis points, below the 140 basis points touched earlier in the month, but continuing to the trend toward further steepening
The worst of the “risk off” trading was Bitcoin which suffered a 6.2% drop in value, closing the month at $82,810, well below the $126,000 touched last October. The sell-off continued into February with the price falling further to a low of $60,000 before rebounding to about $68,000 at the time of this writing.
Precious metals were quite volatile as well with silver rallying from $77 to $121 an ounce before closing the month at $85.19. Following a similar trading pattern gold opened the month at $4,328 an ounce, traded as high as $5,595 before settling at $4, 894 to close the month. Since month end, both have regained their upward trajectory.
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