Daily Rundown

January 12, 2026

Chart of the Day

Number of the Day

0.14 - Option-adjusted spread on the Bloomberg MBS index on Friday, down eight basis points on the day and the lowest since May 2021, after President Trump directed Fannie Mae and Freddie Mac to purchase $200 billion in mortgage bonds

Quote of the Day

"I will oppose the confirmation of any nominee for the Fed -including the upcoming Fed chair vacancy- until this legal matter is fully resolved." - Senator Thom Tillis, on the Justice Department's threat of a criminal indictment against the Federal Reserve

Friday's Highlights

Nonfarm payroll employment (December) rose by 50,000, led by leisure and health care. The unemployment rate and the average workweek both ticked lower.

Housing starts (October) fell by 4.6 percent to their lowest level in more than five years. Building permits were down modestly.

Consumer sentiment (mid-January) ticked up to 54.0 from a prior 52.9. One-year inflation expectations were unchanged.

Household net worth (Q3) rose by 3.5 percent thanks to solid gains in the equity market.

The Justice Department served the Federal Reserve with grand jury subpoenas related to Chair Powell's congressional testimony on Fed headquarters renovations.

President Trump directed Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities in an effort to improve housing affordability.

President Trump called for a one-year cap on credit card rates at 10.0 percent.

Quick Commentary

The labor market looks to be entering 2026 on much the same note as it spent the better part of last year, as job growth, especially in the cyclical sectors, remains lethargic. It is also shaping up to be another year of headline risk, and, as such, another year of elevated uncertainty and volatility, as hinted by the flurry of announcements from the White House at the end of the week. The president's MBS directive has already lowered the yields on mortgage bonds, which should provide a further boost to a housing market that is already showing signs of recovery, but the credit card announcement, if enforced, would very likely mean tighter lending standards while the threatened actions against the Fed are another blow to central bank independence and could potentially upend the nomination for Powell's successor. The upshot is that the dollar debasement trade likely has more room to run and that the confidence interval for growth, inflation, rates, and market performance expectations this year should be considered quite a bit wider than normal.

Daily Trivia

What is the most fragmented large industry in the U.S., with the top ten firms controlling less than 15 percent of the overall market?

(Friday's Question: What competitors are the only two companies in the U.S. with more than a million employees? Answer: Amazon and Walmart)