The latest on trade policy, earnings reports, tariff refunds, inflation and affordability.
One of my favorite stories growing up was about my dad in the blizzard of 1978. My mom would tell it the best, describing how fast the storm came on and how devastating it was while she was home with me, a happy-go-lucky two-year-old. When the snow started to fall, my dad was hard at work in a mechanic’s shop 14 miles away. According to legend, by the time he left, the snow was coming down so heavily his car got trapped. He walked the rest of the way home, over the tops of the roofs of cars (as the snow was that high by then) to get to us and bring us the groceries we needed so I could have milk and toast in the morning.
Many in the Northeast were stuck this week due to the blizzard of 2026, and like my dad in 1978, had to manage through massive snow accumulation, power outages and wind gusts up to 80 miles per hour. This storm adds to the long list of extreme U.S. weather events in recent history, including intense flash floods, a record-setting 21 severe thunderstorms and tornadoes in 2025, and deadly wildfires.
Maybe we should blame that weather for the market’s malaise and frustration as it struggles to regain its 2025 momentum despite strong earnings reports delivered by the likes of Nvidia, Salesforce, and (ironically) Snowflake this week. Beating expectations, giving strong forward guidance and promising to change the future of the way we work and live just wasn’t enough to propel the market higher. Maybe it was because people were too busy focusing on real problems like shoveling out, staying warm and climbing over the roofs of cars to bring their kid breakfast.
No doubt, trade uncertainty remained at the forefront of investors’ minds in the aftermath of last week’s Supreme Court decision that struck down the administration’s use of the International Emergency Economic Powers Act (IEEPA) to implement tariffs. As Bloomberg news pointed out, U.S. trading partners are taking a step back to “reassess compromises” made with President Trump. They need time to understand how the latest proposals impact, potentially violate or complicate agreements struck with the administration over the last year.
There is also the $170-billion question of potential tariff refunds. The Supreme Court didn’t address refunds actively, leaving it to a lower court to sort out what dissenting Justice Brett Kavanaugh assured would be a “mess”. In response to the ruling, the president implemented a new, across-the-board tariff of 10% on all U.S. imports under Section 122 of the Trade Act of 1974, which went into effect on Monday, with the White House working on a formal order to increase the levy to 15%.
During this week’s State of the Union address, the president underscored the progress the administration has made with several of their key agenda items including trade, immigration and international affairs. He also addressed the state of the broader economy and highlighted the decline in inflation and rise in incomes.
Inflation has slowed markedly from a pandemic-era peak of over 9%. However, prices are still rising nominally, and inflation broadly remains well above the Fed’s 2% target. Furthermore, the celebrated disinflationary reprieve has been slow to materialize, leaving consumers bearing the brunt of massive price hikes in nearly every key category of spending over the last five years. Meanwhile, income growth has stabilized at roughly a 4% trend. But, adjusting for inflation, real income growth came in at a more tepid 1.3% pace in January.
And the story on inflation remains uneven, with recent reports like the January Producer Price Index (PPI) report sending another signal of popping price pressures. The PPI release showed month-over-month headline growth in producer prices of 0.5% in January while core PPI, excluding food and energy prices, soared 0.8%, well above the consensus estimates of 0.3% growth for both.
Affordability will seemingly be the buzzword of 2026 on both sides of the aisle, a sore subject in a time when other buzzy headlines on AI disruption continue. This week, it was a Citrini Research report that sent shockwaves through the system, which envisioned a 2028 future where powerful AI models had disrupted vast swathes of the job market. The report further predicted this would in turn upend consumer spending and cause a collapse of the global financial markets. Crisis narratives, as I wrote last week, seem to be our new normal.
I would try, with our help, to rise above those narratives and stay focused on your plan. There are a lot of things to worry about, but that is almost always the case. A few years ago, we were frantic about “The Great Resignation” and now it’s the “AI Apocalypse” that has us gripping our pearls.
The best way to prepare for what lies ahead is to be clear and coordinated on your cash needs, your income and expenses, and what you need to do to make sure you are in the driver’s seat on your financial life. We want to help you write your own story and not end up beholden to someone else’s narrative. The market is going to go up and down and that is a known fact we always must navigate, which is why reaffirming asset allocation and your investment plan is an important thing to periodically do. With that, let’s do it, so we are ready for either the storms or the sunshine, come what may.
Written by a human.