“Do More of What Works and Less of What Doesn’t” — unknown

1. Fed Holds Rates Steady, Nods to Stabilization in Jobless Rate — Federal Reserve officials left interest rates unchanged and pointed to improvements in the US economy as they signaled a more cautious approach to potential future adjustments. The Federal Open Market Committee voted 10-2 Wednesday to hold the benchmark federal funds rate in a range of 3.5%-3.75%. Governors Christopher Waller and Stephen Miran dissented in favor of a quarter-point reduction. The upgraded assessment of the labor market is likely to hold expectations for a near-term rate cut at bay, despite escalating pressure from the Trump administration. Heading into the meeting, investors saw another cut as unlikely until at least June.
2. Meta Reports Record Sales, Massive Spending Hike on AI Buildout — The company said capital spending would reach up to $135 billion in 2026, about 20% higher than Wall Street expectations and nearly double last year’s investment level. Chief Executive Mark Zuckerberg plans to build new data centers around the globe, release new cutting edge AI models and further infuse the core advertising business with AI this year.
3. US Trade Gap Widens From Smallest Since 2009 as Imports Rise — The goods and services trade gap nearly doubled from the prior month to $56.8 billion, Commerce Department data showed Thursday. The 94.6% widening was the largest since 1992, while the shortfall for the month exceeded all projections in a Bloomberg survey of economists. That was the case again in November, with a surge in inbound shipments of pharmaceuticals and a slide in gold exports. Overall imports increased 5%, also boosted by capital goods, such as computers and semiconductors. The latest trade data will help economists firm up their estimates for fourth-quarter gross domestic product. After the figures, the Federal Reserve Bank of Atlanta’s GDPNow forecast net exports would add 0.65 percentage point to fourth-quarter growth, now estimated at 4.2%.
4. Trump Picks a Reinvented Warsh to Lead the Federal Reserve — Warsh, who served on the US central bank’s Board of Governors from 2006 to 2011 and has previously advised Trump on economic policy, would succeed Jerome Powell when his term at the helm ends in May. It marks a comeback for Warsh, 55, whom the president passed over for the top job in 2017 when he selected Powell. If confirmed by the Senate, the former Fed governor will take charge of US monetary policy at a time when many economists and investors see its traditional insulation from elected officials as being under threat from the White House. Warsh aligned himself with the president in 2025 by arguing publicly for lower interest rates, going against his longstanding reputation as an inflation hawk.

The week ahead — Economic data from Econoday.com: