This week’s economic data reinforced the “cooling but not cool enough” inflation narrative. Core CPI rose 0.2% in December and 2.6% year over year, both slightly below expectations, while headline inflation came in right on forecast at 2.7%. Shelter costs remain the biggest source of stickiness, continuing to rise faster than other categories, even as some goods prices showed outright deflation. Markets took the report as confirmation that inflation is easing gradually, but not enough to prompt near-term action from the Federal Reserve. Economists continue to expect the Fed to hold rates steady at its upcoming meeting, with the first potential cut now pushed out to early summer.
Corporate earnings over the past few days have been mixed but generally supportive of the market. Large Wall Street banks like Goldman Sachs and Morgan Stanley delivered strong results driven by trading and investment banking activity, while regional banks showed more uneven performance. In transportation, J.B. Hunt beat profit expectations but issued softer revenue commentary, highlighting pockets of slowing demand. We like to watch the “nuts and bolts” of the economy like manufacturing and transportation for signs of overall economic health. In tech, optimism around semiconductors remains strong, with upbeat guidance from Taiwan Semiconductor helping support the broader AI and chip narrative. As earnings season ramps up, investor focus is shifting from backward-looking results to forward guidance and cost pressures.
On the global front, the U.S. and Taiwan announced a major semiconductor trade agreement that could have long-term economic and market implications. Taiwanese chipmakers committed at least $250 billion to build and expand production capacity in the U.S., while the U.S. agreed to cap reciprocal tariffs and provide key exemptions for companies investing domestically. The deal adds clarity around trade policy, supports supply-chain resilience, and reinforces the push to bring critical manufacturing back onshore.
Interesting to Note
The U.S. Postal Service is changing how mail is postmarked. Going forward, postmarks will reflect when mail is first processed at a USPS facility, not necessarily when it’s dropped off. For time-sensitive items like tax documents, ballots, or legal filings, this could matter—especially if mail is sent close to a deadline. Requesting a manual postmark at the counter may become more important.
Looking Ahead
- Fed Watch: The Fed meets later this month, with markets expecting no change. Inflation and labor data will continue to drive expectations for a possible June rate cut.
- Earnings Season Builds: More major banks, tech companies, and industrial names report next week, with guidance likely to matter more than headline results.
- Inflation Trends: Shelter and service costs remain key areas to watch as policymakers assess whether inflation continues to drift lower.
- Market Tone: After a strong start to the year, volatility may pick up as investors balance slowing growth signals with easing inflation.
Have a nice weekend.
https://www.cnbc.com/2026/01/13/cpi-inflation-report-december-2026.html?__source=iosappshare%7Ccom.apple.UIKit.activity.Mail
https://www.aarp.org/government-elections/usps-postmark-changes/
https://www.cnbc.com/2026/01/14/wholesale-inflation-was-softer-than-expected-retail-sales-moved-higher-in-november.html?__source=iosappshare%7Ccom.apple.UIKit.activity.Mail
https://www.cnbc.com/2026/01/15/us-taiwan-chips-deal-china.html
https://www.cnbc.com/earnings/
Christopher E. Wasson, CFP®
President
Mosaic Asset Partners, LLC
1122 Kenilworth Drive, Suite 310
Towson, MD 21204
410.821.0089 fax 410.821.5993
MosaicAssetPartners.com
Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Mosaic Asset Partners, LLC is not affiliated with Kestra IS or Kestra AS. Investor Disclosures: https://www.kestrafinancial.com/disclosures
The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra IS or Kestra AS. The material is for informational purposes only. It represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. It is not guaranteed by Kestra IS or Kestra AS for accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security.
