This week, financial markets were shaped by a convergence of monetary policy continuity and rising attention to Federal Reserve leadership. At its January meeting, the Federal Reserve voted to hold interest rates steady, marking the first pause since it began easing policy in mid-2025.

Investors returned from the long weekend to something more jarring than the usual post-holiday lull: a burst of geopolitical theater that triggered the sharpest pullback in the S&P 500 since last October.