Core CPI rose, less than expected

 The core Consumer Price Index (CPI), which excludes volatile food and energy costs, rose 0.2% in December and 2.6% over the past year, slightly below expectations and marking one of the lowest annual readings in several years. Meanwhile, headline inflation held steady at 2.6% annually, in line with forecasts and suggesting that price pressures are gradually easing but still above the Federal Reserve’s 2% target. 

The latest CPI report reflected mixed forces across the economy. Shelter costs, the single largest component of overall inflation, rose 0.4% in December, while food prices climbed about 0.7% for the month. Energy prices edged higher, although gasoline prices slipped, and some durable goods like used cars and trucks saw price declines. Other areas, including airfares, recreation, and medical care, recorded notable increases, highlighting that inflation remains uneven across sectors.

Investors responded calmly to the data, with stock futures moving up slightly and Treasury yields dipping, as markets priced in the likelihood that the Federal Reserve will keep interest rates unchanged in the near term. The softness in core inflation adds to the view that price growth is moderating, though persistent costs in key categories may keep the Fed cautious about cutting rates too soon. 

https://www.cnbc.com/2026/01/13/cpi-inflation-report-december-2026.html

The Predicted Effects of AI on the Job Market

There have been many predictions on how AI will affect job markets, but before making wild predictions, it is useful to look back at past technological advancements. In the past, new innovations like steam power, electricity, and personal computers all took 20 to 40 years for their impact on the labor markets to be seen. The Internet and digital spreadsheets took 10 to 20 years. These delayed effects allowed the economy and job market to prepare. However, AI integration has been and is expected to be far faster than that of these other technologies. 

This leaves us with two different possibilities concerning the future of AI and the Job Market. Some people believe that AI will displace workers more quickly than jobs can adapt. This may create something similar to the Rust Belt, but in cities across the world. Some think that if AI integration is slower, it will allow the workforce to adapt. If the job market had time to adapt to the use of AI, then it is predicted that fewer jobs would be lost and AI would be more effectively used to assist workers. The World Economic Forum has expressed optimism that, in the short term, job creation will outpace job loss. 

Another factor that impacts the speed at which AI invades the job market is the availability of labor. In countries with immigration control and aging populations, some companies are facing difficulties in obtaining labor. This has led to an increase in the use of AI. Japan, where there are tight immigration controls and an aging population, has started uing AI for jobs such as the care of the elderly (robot assistance). The presence of a skilled workforce may, in fact, slow the integration of AI in the workforce.

It is unclear exactly how AI will affect job markets, and difficult to account for all the factors that play into this issue. However, it is clear that it will be essential for the workforce to learn how to integrate and work with AI. 

https://apple.news/Ayta1fi4fTiavD1pjCRrf_g

Gold just hit a record high. What is causing this surge?

 

In early 2026, the price of gold had climbed to record highs, surpassing $5,000 per ounce for the first time. This latest surge builds on an extraordinary rally: in 2025, gold prices soared about 65%, the largest annual increase since 1979, and over the first 26 days of 2026 alone, gold has risen roughly 15% — pushing spot prices near $5,058  troy ounce.

Gold is widely seen as both a safe-haven asset and a barometer of market anxiety, drawing investors when global and domestic uncertainty intensifies. The most recent jump in gold prices has been fueled by a series of market-destabilizing events and policy shifts associated with President Donald Trump. These include the now-revoked tariff threats against NATO allies over Greenland, the U.S. military operation to capture Venezuelan President Nicolás Maduro, and the opening of a criminal investigation into Federal Reserve Chair Jerome Powell — developments that have heightened concerns about geopolitical risk and the independence of U.S. economic institutions.

Additional factors driving demand for the precious metal include a weaker U.S. dollar, higher-than-expected inflation, and market expectations that the Federal Reserve will cut interest rates later this year. Investors, unsettled by ongoing policy uncertainty and economic volatility, have increasingly turned to gold as a hedge against instability, helping push prices to historic levels.

Gold just hit a record $5,000. What’s driving the surge? 

USA Rare Earth shares jump 20% as Commerce Department takes equity stake

 USA Rare Earth shares surged more than 20% after the company announced that the U.S. Department of Commerce plans to take an equity stake in the critical minerals startup. This proposed deal includes a $1.3 billion loan and $277 million in federal funding in exchange for common stock and warrants. Giving the U.S. government an 8% to 16% ownership stake. USA Rare Earth also raised $1.5 billion form private investors, though the agreement is still subject to final approvals and conditions.

This funding will help USA Rare Earth build a magnet manufacturing plant in Stillwater, Oklahoma, which is expected to be commissioned in early 2026. The funding will also go to develop the Round Top rare earth mine in Texas, with commercial mining planned for late 2028. The company estimates it will need $4.1 billion to execute its full plan and still must raise about $600 million more. 

The investment is part if a broader effort by the Trump administration to strengthen a domestic rare earth and critical minerals supply chain. In turn, reducing U.S. dependence on China. This became a concern when Beijing tried to cut off rare earth exports last year during trade disputed with the Trump administration.

USA Rare Earth shares jump 20% as Commerce Department takes equity stake

Canada Backs Away From China Trade Deal

     Prime Minister Mark Carney, makes it clear Canada does not want to chase a free trade deal with China anytime soon. Carney emphasized that Canada will honor its commitments under the Canada-U.S.-Mexico (CUSMA) Agreement. This news came out after, President Trump threatened to impose a steep 100% tariff on Canadian exports if Canada made a larger deal with Beijing. 

    The comments come as tensions rise between the two neighbors. Trump argued that Canada could become a gateway for Chinese goods into the U.S., but Carney pushed back, saying Canada's recent agreement with China was focused only on fixing tariff issues that had built up over the years. The agreement lowers tariffs on a small number of products, including Chinese electric vehicles entering Canada and Canadian agricultural exports heading to China and follows CUSMA rules.

    The situation highlights how Canada is trying to balance trading with other countries while also keeping a strong relationship with the U.S.  With tough language and tariff threats coming from Washington, Canada seems more focused on avoiding conflict and protecting its economy than on making bold new trade deal with China right now.

https://www.cnbc.com/2026/01/26/canada-china-trade-deal-tariffs-trump.html

AI honeymoon is over?

 Artificial intelligence single-handly boosted the economy in 2025. AI stocks including Google, Nvidia, and CoreWeave were just a few stocks that ended up booming in 2025 due to AI. As 2026 comes around people are looking for the next stock to make them rich and the Deutsche Bank warns the public that the AI honeymoon will be coming to an end in. 

A big reason why is due to the fact that AI has not proved to be effectivly cheaper than human workers in many work settings. This is leading to a lack of ROI and cause stockholders to be cautious where they are putting their money. It is still very possible that AI will take over some jobs in the future but the rapid change that was expected has not happened yet leading people to believe it still needs some time. 

Next, AI data centers are already at capacity and some companies are scrambling just to find the money to support spending that is over 15 billion. Investors are also seeing the lack of infastutcure to support the growth of AI currently which could send some companies back to square one. 

Finally, if a pullback of investment in AI occurs some analysts warn that it could trigger financial market correction that would drop global growth. If this happens it opens that door for competitors like China to get ahead of the United States in the AI race which would prove detrimental to the U.S. in the future. 

https://www.investing.com/news/stock-market-news/why-deutsche-bank-says-the-ai-honeymoon-is-over-4455029

Trump Walks Back Tariffs on European Countries

In an interview with CNBC at the World Economic Forum in Davos, Switzerland, President Trump said he'd walked back tariffs on eight European countries. He's been threatening tariffs recently on countries that opposed his pursuit of Greenland, but has backtracked on some of those because he says he has the concept of a deal. 

This caused the markets to rise tremendously in response to the news from Switzerland. The Dow Jones, NASDAQ, and S&P 500 all rallied big on Thursday, recovering from dips earlier in the week. The circumstance is still very volatile, and we'll have to wait and see what happens with Greenland and the effects it will have on the economy.

https://www.cnbc.com/2026/01/22/trump-tariffs-greenland-europe-deal-taco-trade-sell-america.html 

AI’s Productivity Paradox

Artificial intelligence is often praised for making work faster, easier and better. However, at the task level, this is partly true. Recent studies show that AI can help people complete certain tasks much more quickly. However, when economists look at productivity across companies or the economy as a whole, the gains are surprisingly small. This gap is known as the AI productivity paradox.

One reason is that AI helps less experienced workers more than experts. While beginners benefit from the AI's guidance and structure, experienced workers often spend extra time checking and fixing AI output. Also faster individual task, do not always improve overall results.

AI adoption is another limitation. Most firms are still experimenting, and the time savings per worker are relatively small. As a result, AI’s impact has not yet shown up in broader productivity data.

Overall, AI is changing how people work, but real productivity growth will depend on how well organizations adapt their processes around it.

https://www.forbes.com/sites/guneyyildiz/2026/01/20/ai-productivitys-4-trillion-question-hype-hope-and-hard-data/

Trump vows to make US affordable again, as Americans feel the pinch

Despite promises from the Trump administration, consumers still question the affordability of daily life. On paper, inflation has slowed, wages are rising faster than prices, and rent increases have moderated in comparison to peak times in 2020. These shifts suggest that purchasing power is returning to the American people.

Although these increases are positive, American consumers still feel that their income is being tightened by high cost in food, healthcare, and childcare. Housing prices are high, especially in major cities and interest rates, although being cut, still affect the true affordability of homes. Analysts suggest that progress in data is clashing with structural challenges in the U.S. economy.

https://www.bbc.com/news/articles/ckgl63lrpkmo

The Fed Pauses Rates

A major recent economic event was the Federal Reserve’s choice to hold interest rates steady after raising them repeatedly over the past two years. This move signals that inflation is finally cooling, but the Fed isn’t confident enough yet to start cutting rates.Inflation has slowed, especially in energy and goods, but core prices are still slightly above the Fed’s 2% goal. By pausing, the Fed is trying to support the economy without risking a rebound in inflation.

The decision immediately affected markets: mortgage rates leveled off, the stock market reacted positively, and businesses gained a clearer sense of short-term financial conditions. Still, borrowing costs remain high, meaning investment and hiring may stay slower for now.

Overall, the Fed’s pause shows an economy that’s stabilizing but not fully out of the woods. The next few months will reveal whether inflation continues to fall or if more action is needed. 

https://www.federalreserve.gov/monetarypolicy/monetary20250730a.htm?utm_source=chatgpt.com