All is relatively quiet on the political front as investors look ahead to Wednesday’s Federal Open Market Committee interest rate decision. Markets expect no fireworks from officials who have already indicated they are leaning out of the January meeting.

Respondents to the latest economists’ poll predicted rate-setters will announce unchanged policy at the conclusion of the two-day meeting. Analysts say markets are effectively fully priced for a hold at 3.5–3.75%, particularly given there will be no Summary of Economic Projections release, and balance-sheet policy is now firmly in the rearview mirror.

On the voting dynamics, JP Morgan’s Michael Feroli noted that after three 25bp “risk-management” cuts in the second half of last year, many FOMC participants had signalled it was an appropriate time to pause. “In fact, the minutes from the December meeting indicated that some voters who went along with the rate cut did so only reluctantly,” he said.

Nonetheless, one White House appointee, Stephen Miran — a vocal proponent of aggressive easing — is expected to dissent once again in favour of a cut. (LiveSquawk – Continue Reading)

A year into the second Trump administration, tariffs have taken center stage in U.S. economic and foreign policy. They are being applied broadly and justified on grounds well beyond traditional trade enforcement, yet they have not produced the economic disruption or retaliation many observers anticipated. However, the significance of this shift lies less in the increase in tariffs than in a broader redefinition of the role trade policy itself now plays in economic and national security strategy. Understanding this shift—and why the response has been more muted than expected—requires grappling with a broader change in how U.S. trade policy is conceptualized and conducted.

For much of the postwar period, U.S. trade policy was designed to operate largely in the background within a multilateral, rules-based trade framework. The system was designed to reduce conflict and discourage retaliatory trade behavior while allowing market forces to play the primary role in allocating economic activity across countries. This framework did not eliminate government intervention; it was not apolitical nor was it divorced from strategic objectives. The system’s architects built in mechanisms intended to allow it to adapt over time, but this adaptive capacity proved limited in practice. Technological change, shifts in global production, and evolving geopolitical conditions placed increasing political strain on a framework that struggled to update its core rules and enforcement mechanisms. (Brookings Institution – Continue Reading)

The European Union has switched on parts of its homegrown secure satellite communications network for the first time, as part of a €10.6 billion push to provide an alternative to Starlink and wean itself off US support amid growing tensions.

Elements of the IRIS2 and GOVSATCOM networks began limited operations last week for government and military use, Defense and Space Commissioner Andrius Kubilius said at the European space conference in Brussels on Tuesday. Ukraine has requested access, and provisions to do so are under way, he said. (Bloomberg – Continue Reading)