US Jobs Up, Inflation Tame: Mixed Signals for Fed Policy (Jan 2026)

January 2026 payrolls rose 130,000, with the unemployment rate falling to 4.3%, per the Bureau of Labor Statistics, following upward revisions to prior-year gains. Core inflation for the month was broadly in line with expectations, supporting bets for additional Fed rate cuts this year. Household delinquency on mortgages and credit cards reached 4.8% of outstanding debt in Q4 2025, the highest since 2017, reflecting heightened risk among younger and lower-income borrowers. In Japan, Prime Minister Sanae Takaichi’s ruling Liberal Democratic Party won its largest postwar victory, driving gains in Treasuries and volatility in government bonds. Other regions saw mixed results: Europe’s GDP growth slowed to 0.1% for two consecutive quarters; Mexico’s inflation accelerated; India’s inflation revised down, maintaining a pause in policy tightening; and Hungary’s inflation hit a near-eight-year low, prompting a potential rate cut.