January 2026 FOMC Preview - Dovish under pressure? (Podcast Edition)

In this Podcast, George Goncalves, MUFG Head of Macro Strategy for the Americas discusses how January has been action packed, where isolating the signal from the noise means that the house view at MUFG hasn’t fundamentally changed. In our view, the US economy still looks to be setting down a path of a tale of two halves, with fiscal policies expected to mask underlying weakness in the first half of the year, and with stagnant labor demand being the dominant force in the second half that drags income and consumption growth down. We also discuss the upcoming first FOMC meeting of the year where the Fed may highlight the upcoming benchmark revision to nonfarm payrolls, that is expected to show even weaker jobs growth than previously thought, if they wish to project a more dovish tone, but markets are anticipating a relatively hawkish Fed that doesn’t cut again until June when Powell is out as Chair. Meanwhile the surprise factor for the global rates markets has been the large swing in JGB rates. George explores why this is happening and why what is taking place in Japan might be more moving than US data and the Fed, for now.