Hey how is everyone doing. Welcome if you are new here. As we do every Monday morning on our newsletter we are breaking down what we expect from the market this week. We are going to be talking about all the things that happened this past weekend with credit card rate cap and all the reports/news coming out this week.

Wow all of this we think may be a very volatile week ahead. We will try to break down a couple of these and what we think it will mean for the markets.

Credit Card Rate Cap (1)

Over this past week, President Donald Trump called for a one year, 10% cap on credit card interest rates starting January 20, 2026. This proposal is aimed at trying to bring affordability concerns down as the current APR for a credit card is 20-30%. While some people think that this is a bad thing, for this to happen it has to go through Congress. It is not an immediate rule change and he doesn’t have the authority to impose the cap himself. With everything in Congress this could take awhile. There have been attempts in the past with bipartisan bills introduced but have failed to make it into law. In order for this to go through here are three things that have to happen.

We personally think that given all of these things that need to happen, this actually happening would be pretty low but you never know. However we do think that the market will react to this as a cap would lose companies tens of billions of dollars. If this was also passed then banks will reduce credit limits, cancel cards for higher risk, and lend less cards to people. It might hurt more people in the end who need them or use them for daily life. We think that the market could react poorly today as we see futures are down. We will be watching to see if there is a big drop and possibly a good buying opportunity as the reaction might hurt the stocks in the short term.

December CPI Inflation Data (3)

The bureau of Labor Statistics is going to release the Consumer Price Index (CPI) on Tuesday. This is basically just a headline that is a gauge of inflation, tracking how prices paid by consumers for goods and services change over time. The economists are forecasting 2.7-2.9% headline CPI which is mostly in line or slightly above November’s reading. The expected change is a slight increase than November. With the government shutdown alst fall there was some data distortions, which paused regular price collection in October and hurts for comparisons purposes. So this is more like a catch up as it will offer some good insight into where inflation is heading. The Federal Reserve has a long run target of 2%. Compared to earlier 2025, inflation has trended lower from the highs of 2022-2023.

The reason this report is so important is it influences expectations about when and how much the Fed will change interest rates. If inflation comes back below consensus, markets may price greater odds of rate cuts later in 2026 as the price pressures lesson. If its higher then it could have them delay the lowering of interest rates. Depending on how the report goes, we think that tech sectors would boost if lower than expected and if higher could lower real estate and utilities. Just another thing to watch this week!

US Supreme Court Tariff Ruling (5)

Another thing that we think is key this week is that the U.S. Supreme Court is expected to issue a fuling on the legality of Trump administrations tariffs. He used emergency executive powers rather than direct congressional approval. The question is whether those national security laws were intended to allow broad trade tarrifs or if the administration overstepped its authority. This is a SUPER important case as the tariffs have effected hundreds of billion of dollars in global trade, and consumer prices. Investors like ourselves are less focused on the policits but more so how it could effect the market.

If the Court decides to strike down the tariffs, the market may react positively as import heavy companies and consumer focused businesses could see lower costs and improved margins. However have you ever seen a company decrease there prices once they raise it? We think that prices will stay the same for most things and companies will just have a big increase in profit. So could be good for the market in the sense more profit for companies which would send their stock higher potentially but bad for the consumer. If it is determined that they are okay then then markets might stay the same. Who knows if the market has already factored this piece in. We think that the Supreme Court could also just keep pushing the ruling and we saw on social media President Trump would use other means to enforce tariffs. However this ends up it will be very interesting to see the markets and how other countries react if we refund them their tariffs.

Alright that is it for this week. We hope you have a great week and as always please do your own research as it may be a very volatile week.

This newsletter is provided for informational and educational purposes only and reflects the personal opinions of the authors. It does not constitute financial, investment, legal, or tax advice, nor is it a recommendation or solicitation to buy, sell, or hold any security or financial instrument.

The content is not intended to be, and should not be construed as, personalized investment advice. Any market commentary, outlooks, or examples referenced are general in nature and may not be suitable for all investors.

All views expressed are subject to change without notice. Forward-looking statements, projections, or expectations are inherently uncertain and are based on assumptions that may not prove accurate. Actual outcomes may differ materially.

The authors may hold positions in securities discussed and may change such positions at any time without notice. Readers should conduct their own independent research and consult with a licensed financial professional before making any investment decisions. The authors make no representations or warranties regarding the accuracy or completeness of the information and accept no liability for any losses arising from its use.

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