On Tuesday, inflation numbers were reported. The Consumer-Price Index (CPI) rose by 2.7% for the year. Core CPI, which takes out food and energy costs, rose by 2.6%. Both are above the Federal Reserve’s 2% target but are lower than expectations and will give the Fed some room to pause interest rate cuts. It may not feel like inflation is calming down because grocery prices rose in December by 0.7%, which is the fastest monthly rate in three years. Under the hood, you see that over the last 12 months, coffee is up 20%, beef 16%, and candy 10%. But eggs are down 20%. Grocery prices are volatile due to several factors including supply and demand, government policy and the weather with weather probably being the easiest to predict of the three 😊. CPI inflation report: December groceries see biggest spike since 2022
Federal Reserve Chair Powell and the Fed’s Independence:
The independence of the Federal Reserve is a major contributor to the stability and credibility of the US economy. The Fed is responsible for conducting monetary policy, supervising and regulating financial institutions, maintaining financial stability, and providing financial services to the government and the public. Its ability to carry out these roles effectively depends in large part on its independence from short-term political pressures.
While the Fed operates within the framework of goals set by Congress, the two main goals being maximum employment and price stability, it makes monetary policy decisions without needing approval from the President or Congress. This separation allows the Fed to take a long-term view of the economy rather than reacting to the ever-changing political climate.
This independence is crucial because monetary policy often involves difficult decisions that may be unpopular in the short term but beneficial over the long run. For example, raising interest rates to combat inflation can slow economic growth and increase borrowing costs. However, if the Fed were subject to political influence, policymakers might be pressured to keep rates artificially low to stimulate the economy before an election, potentially leading to runaway inflation or asset bubbles later.
While independence is vital, accountability is equally important. The Fed regularly reports to Congress, publishes meeting minutes, and communicates policy decisions to the public. This transparency ensures that while the central bank is free from political interference, it is still answerable to the democratic institutions it serves.
On Sunday, it was announced that the Justice Department has started a criminal investigation into Chair Powell’s testimony to Congress on the Fed’s building project’s cost overruns. This is not the first time the administration has seemingly attempted to lean on Powell, but it is the first time Powell responded. He put out a statement voicing his opinion that the investigation was not about the building project or his testimony but it “is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation.” Statement from Federal Reserve Chair Jerome H. Powell - Federal Reserve Board
Financial Planning/Investment Strategy Corner:
AI Stocks Still Have Room? And the Banking Sector Takes a Hit:
We are not stock pickers. We believe in staying broadly diversified across US and international equity markets is the most prudent way to invest. But that doesn’t mean we don’t pay attention to how individual companies and sectors are performing. Recently there have been some interesting things to watch.
Alphabet (Google’s parent company) has had quite a run. The early months of 2025 were not nice to Google. In fact, as of April 8th of last year, Google was down 23.03% since the beginning of 2025. Now fast forward to today, and since January 1st of 2025 Google has been up 78.18%. If you go back to the dip on April 8th, it’s up 129.52% as of 01/13/26. In just the last week, Apple confirmed they will use Google’s Gemini to run Suri, and Walmart will use Gemini as part of their AI shopping. That’s quite a week!
Here is Google’s stock price compared to the S&P 500 from 01/01/2025 to 01/13/2026.
On the other side of the ledger sits the banking sector which is taking a hit. Last Friday, it was announced that the administration is looking into implementing a one-year rate cap of 10% on credit cards. This may be a short-lived dip with the 10% cap not materializing since it is less than half of the current average credit card rate. Trump calls for a 10% cap on credit card interest rates: NPR
JPMorgan Chase’s CFO, Jeremy Barnum, said the rate cut would “punish consumers and dent the economy.” He added that the cap would probably lead to banks offering less credit, especially to those with lower credit scores.
The idea does make for strange bedfellows with Senators Elizabeth Warren and Bernie Sanders supporting the cap.
Here is JPMorgan Chase compared to the S&P 500 since January 7th of 2026
Pink Cocaine?
Here is something to scare everyone. The newest drug showing up in nightclubs and drug busts is called pink cocaine, but it’s not cocaine at all. It is a mix of drugs most often including ketamine and ecstasy that are mixed sometimes with either methamphetamine or fentanyl. No two batches are the same and the pink color that is added with dye makes it “Instagrammable”. All of this is terrifying to me. "Pink cocaine" is spreading in U.S. — and users don't know what's in it
Quick Hits:
- Valentine’s Day is less than a month away! Here are some ideas: 95 Valentine's Day Ideas for Any Relationship Stage Visitingnewengland.com/Valentines
- Winter is the best time for crockpot cooking! I am making beef stew and chili this weekend. Here are some ideas: 88 Winter Crockpot Meals 25 Winter Crock-Pot Recipes
- Looking back at 2025 – If you haven’t seen it yet, The Residence is great! 50 wonderful things of 2025: NPR
- I have started my travel bucket list and on that list is a rail trip across Canada but while I was looking into it, I found some great shorter trips in the US that look fantastic! 6 Best Luxury Trains in the U.S. Train Journey Through America's Southwest | Canyon Spirit
A Couple January Quotes:
- “To appreciate the beauty of a snowflake, it is necessary to stand out in the cold.” – Aristotle
- “A lot of people like snow. I find it to be an unnecessary freezing of water.” – Carl Reiner
- “There’s just something beautiful about walking on snow that nobody else has walked on.” – Carol Rifka Brunt
And I will share some of my snow with you!
Thank You for Reading
Thank you for being part of the RSWA community and for reading Financial Advisor Insights! We welcome your feedback — and please share this with a friend or colleague who might enjoy it.
Be well, take care, and stay safe!
