{"id":14079,"date":"2026-01-20T15:21:31","date_gmt":"2026-01-20T15:21:31","guid":{"rendered":"https:\/\/zacksim.com\/blog\/?p=14079"},"modified":"2026-01-20T15:21:31","modified_gmt":"2026-01-20T15:21:31","slug":"surprising-global-growth-fed-chair-drama-consumers-under-stress","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/surprising-global-growth-fed-chair-drama-consumers-under-stress\/","title":{"rendered":"Surprising Global Growth, Fed Chair Drama, Consumers Under Stress"},"content":{"rendered":"\n<p class=\"has-black-color has-text-color has-link-color wp-elements-a5fd76253d82043d1388019365a44530\"><a>Markets are navigating a noisy mix of headlines and volatility. In this issue of <em>Steady Investor<\/em>, we break down what\u2019s driving sentiment\u2014and how to stay focused on long-term growth, including:<\/a><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Global growth proved resilient<\/li>\n\n\n\n<li>Fed investigation not moving markets<\/li>\n\n\n\n<li>Spending strong, inflation sticky<\/li>\n<\/ul>\n\n\n\n<p><strong>Why Global Growth Keeps Surprising Investors \u2013 <\/strong>For the better part of last year, there was a growing consensus that a shifting global trade order would hurt growth overall. That did not appear to happen. The global economy posted better-than-expected growth in 2025, which for investors is a classic recipe for strong equity market returns. The World Bank now estimates global GDP expanded 2.7% in 2025, which was well above its midyear forecast. While growth is expected to moderate slightly this year, forecasts were still revised higher, reflecting stronger momentum across both advanced and emerging markets. As we\u2019ve covered many times in this space, the U.S. economy continued to expand as consumers continued spending at an elevated clip. Oversees, Europe\u2019s largest economies also demonstrated unexpected resilience. Germany returned to growth in 2025 after two consecutive contractions, with GDP rising 0.2%. While its export-oriented model remains challenged by tariffs, currency strength, and Chinese competition, a decisive shift toward fiscal stimulus and defense spending is beginning to change the growth mix. Large-scale defense and infrastructure spending has helped stabilize factory orders and industrial output, signaling that domestic demand is starting to replace exports as a growth engine.The U.K. also displayed tentative but meaningful signs of stabilization as well.<sup>1 <\/sup>Economic activity rebounded late last year, driven by stronger industrial production\u2014particularly in autos\u2014and steady services growth. Full-year GDP growth of roughly 1.4% marks an improvement from prior years, even as households remain cautious and investment lags peers.<\/p>\n\n\n\n<p>All told, global growth is proving more durable than feared, and growth in some key markets is re-accelerating despite structural and policy headwinds.<sup>2<\/sup><\/p>\n\n\n\n<p><strong><u><a href=\"https:\/\/go.steadyinvestor.com\/navigating-market-volatility-zim?source=zim&amp;medium=blog&amp;term=bimonthly_navigating_volatility_zim_01_19_2026&amp;content=navigating_volatility\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/navigating-market-volatility-zim?source=zim&amp;medium=blog&amp;term=bimonthly_navigating_volatility_zim_01_19_2026&amp;content=navigating_volatility\">Staying Focused When Markets Move<\/a><\/u><\/strong><\/p>\n\n\n\n<p>With markets reacting to rate expectations, inflation data, and constant headlines, it\u2019s easy to lose focus. But reacting to short-term swings can do more harm than good.<\/p>\n\n\n\n<p><strong><em><u><a href=\"https:\/\/go.steadyinvestor.com\/navigating-market-volatility-zim?source=zim&amp;medium=blog&amp;term=bimonthly_navigating_volatility_zim_01_19_2026&amp;content=navigating_volatility\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/navigating-market-volatility-zim?source=zim&amp;medium=blog&amp;term=bimonthly_navigating_volatility_zim_01_19_2026&amp;content=navigating_volatility\">Navigating Market Volatility<sup>3<\/sup><\/a><\/u><\/em><\/strong> is a free guide designed to help you stay disciplined when markets feel uncertain. It outlines four practical principles to help you cut through the noise, manage risk, and stay confident in your long-term plan. Download it to learn how to:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Sharp market declines and corrections are a normal part of investing<\/li>\n\n\n\n<li>The best market days come unexpectedly (often within days or weeks of the worst days)<\/li>\n\n\n\n<li>Trying to pick market tops and bottoms is nearly impossible<\/li>\n\n\n\n<li>Trust your strategy and discipline, not the headlines<\/li>\n\n\n\n<li><strong><em>Plus, more insights and assistance to help you keep your investment strategy on course<\/em><\/strong><\/li>\n<\/ul>\n\n\n\n<p>If you have $500,000 or more to invest, get your free volatility guide today!<\/p>\n\n\n\n<p><strong><em><u><a href=\"https:\/\/go.steadyinvestor.com\/navigating-market-volatility-zim?source=zim&amp;medium=blog&amp;term=bimonthly_navigating_volatility_zim_01_19_2026&amp;content=navigating_volatility\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/navigating-market-volatility-zim?source=zim&amp;medium=blog&amp;term=bimonthly_navigating_volatility_zim_01_19_2026&amp;content=navigating_volatility\">Download Your Free Copy Today: Navigating Market Volatility: 4 Principles for Staying the Course<sup>3<\/sup><\/a><\/u><\/em><\/strong><\/p>\n\n\n\n<p><strong>Markets Aren\u2019t Panicking About a Criminal Investigation at the Fed\u2014Yet \u2013 <\/strong>A newly announced Justice Department investigation involving Fed Chair Jerome Powell has reignited debate about how insulated US monetary policy is from outside pressure. The issue centers on Powell\u2019s testimony before the Senate Banking Committee last June regarding the Fed\u2019s multiyear renovation project, and Powell has said the Fed received grand jury subpoenas that threaten a potential criminal indictment. Without wading into the political fray, investors should really just be focusing on one key question: <em>whether this investigation meaningfully changes the policy outlook<\/em>. So far, markets appear to be treating it as a headline escalation, not an abrupt regime shift. Powell\u2019s term as chair ends May 15, 2026, and his term as a governor runs through January 2028. Put another way, a leadership transition was already approaching, and uncertainty about the post-chair path was already part of the backdrop. Even in a noisy environment, however, the Fed\u2019s decision-making process is shared across the FOMC, and future appointments require Senate confirmation\u2014constraints that tend to limit \u201covernight\u201d changes in how policy is set. That does not eliminate longer-run risks to perceived Fed independence, but it does help explain why investors are not overreacting to the story in the short-term.<sup>4<\/sup><\/p>\n\n\n\n<p><strong>Strong Spending, Sticky Prices\u2014Is the U.S. Consumer Near a Breaking Point? \u2013 <\/strong>A batch of December data reinforced the picture of an economy that remained on solid footing late in the year, even as the inflation picture remained mixed. Starting with wholesale inflation, the producer price index rose 0.2% month over month, below forecasts, while core PPI excluding food and energy was flat, according to the Bureau of Labor Statistics. On a year-over-year basis, headline PPI rose 3.0%, with core PPI excluding trade services up 3.5%, the fastest pace since March 2025. Goods prices climbed 0.9%, largely due to a 4.6% increase in energy costs, while services prices were unchanged.Consumer spending also showed resilience.<sup>5<\/sup> Retail sales rose 0.6% in November, exceeding expectations, with gains in 10 of 13 categories. Excluding autos, sales increased 0.5%, and the control group that feeds directly into GDP rose 0.4%, according to the U.S. Department of Commerce. Year-over-year sales growth of 3.3% outpaced consumer inflation, signaling real momentum in goods demand, even though the data are not adjusted for prices and were delayed by last year\u2019s government shutdown.Finally, housing added another layer to the story. Existing-home sales jumped 5.1% in December, the largest monthly gain in nearly two years and the fourth straight increase, according to the National Association of Realtors. Sales reached their highest level since early 2023, aided by mortgage rates drifting toward 6.2% and slowing home-price growth. Still, 2025 marked the third consecutive year of historically weak sales, with transactions at their lowest level since the mid-1990s when measured per household. Overall, we see a picture of steady consumer activity within a backdrop of stubborn, but not re-accelerating, inflation. The question is whether the consumer can keep hanging on.<sup>6<\/sup><\/p>\n\n\n\n<p><strong>Volatility Isn\u2019t New. How You Respond Is What Matters &#8211; <\/strong>Markets move through cycles of optimism and uncertainty, often driven by changing expectations around rates, inflation, and policy. While headlines can shift quickly, investor outcomes are shaped by decisions made over time, not by short-term reactions.<\/p>\n\n\n\n<p><strong><em><u><a href=\"https:\/\/go.steadyinvestor.com\/navigating-market-volatility-zim?source=zim&amp;medium=blog&amp;term=bimonthly_navigating_volatility_zim_01_19_2026&amp;content=navigating_volatility\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/navigating-market-volatility-zim?source=zim&amp;medium=blog&amp;term=bimonthly_navigating_volatility_zim_01_19_2026&amp;content=navigating_volatility\">Navigating Market Volatility<sup>7<\/sup><\/a><\/u><\/em><\/strong> is a free guide that offers a clear framework for staying disciplined and managing risk during uncertain markets. It covers topics such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Sharp market declines and corrections are a normal part of investing<\/li>\n\n\n\n<li>The best market days come unexpectedly (often within days or weeks of the worst days)<\/li>\n\n\n\n<li>Trying to pick market tops and bottoms is nearly impossible<\/li>\n\n\n\n<li>Trust your strategy and discipline, not the headlines<\/li>\n\n\n\n<li><strong><em>Plus, more insights and assistance to help you keep your investment strategy on course<\/em><\/strong><\/li>\n<\/ul>\n\n\n\n<p>If you have $500,000 or more to invest, access your free volatility guide today.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The global economy shows durability with better-than-expected growth in 2025, markets not panicked by Fed Chair Jerome Powell probe, consumer activity steady\u2014for now.<\/p>\n","protected":false},"author":3,"featured_media":13584,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[71,73],"tags":[],"class_list":["post-14079","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-private-client-group","category-steady-investors-week"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/14079","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=14079"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/14079\/revisions"}],"predecessor-version":[{"id":14080,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/14079\/revisions\/14080"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media\/13584"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=14079"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=14079"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=14079"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}