Prof G Markets Fed Holds Rates — Inflation Back in Focus
226 snips
Jan 29, 2026 
Michael Gapen, Morgan Stanley’s Chief U.S. Economist, on Fed policy, inflation dynamics, and the dollar’s moves. Gil Luria, DA Davidson’s Head of Technology Research, on Microsoft and Meta earnings, AI exposure, ad growth, and tech valuations. Multiple short conversations cover Fed strategy, currency swings, cloud and AI trends, and who stands to benefit from near-term AI profits.
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Tariffs Seen As Transitory Inflationary Force
- The Fed views tariff-driven goods-price rises as mostly transitory once pass-through completes.
- They see services inflation decelerating and expect inflation to come down over time.
Data Gaps Raise Inflation Uncertainty
- Gapen cautions that data gaps from the shutdown may understate near-term inflation and require watchfulness.
- He notes the Fed keeps policy modestly restrictive to guard against upside inflation risks.
Dollar Drop Signals Policy Concerns, Not Fed Targeting
- Dollar moves and gold gains reflect broad concerns about U.S. policy, but the Fed won't set rates to target the currency.
- Gapen says global holders must still keep dollar assets, so hedging and price adjustments drive volatility.