US economic growth in the fourth quarter came in below expectations, with annualized GDP rising only 1.4%. Data from the Bureau of Economic Analysis shows that the prolonged government shutdown and weaker trade were key factors behind this weakness. Despite the slowdown, the American consumer and heavy investment in artificial intelligence infrastructure have continued to support the economy. Donald Trump described the shutdown’s impact as significant, while core inflation remains elevated and complicates the monetary policy path. As a result, Federal Reserve officials currently prefer to keep interest rates unchanged until a clearer picture of inflation and growth emerges.

The court ruling invalidates a large portion of Trump administration tariff policies in its second term, but other legal avenues to impose tariffs remain available to the White House. Trump called the ruling regrettable and stated he intends to rely on other trade laws, including Section 122 of the Trade Act of 1974, to impose tariffs of around 10% on foreign goods. However, these alternative paths are usually more time consuming and come with greater legal limitations, therefore implementing tariffs quickly and broadly, as in the past, will be more difficult.

The oil market has started 2026 with a price surge, with Brent climbing above 72 dollars, largely driven by geopolitical risks and supply disruptions. Traders are rapidly hedging through futures and options markets due to the possibility of conflict involving Iran and Donald Trump. Concerns about the security of oil transit through the Strait of Hormuz and reduced supply in some countries have turned expectations of surplus into a tighter market. As a result, volatility has increased and analysts believe the geopolitical risk premium could push oil prices even higher.

Rachel Reeves, the UK Chancellor, is approaching her Spring Statement supported by a set of better than expected economic data. According to the ONS report, the January budget surplus reached a historic record and retail sales climbed to their highest level in 20 months. At the same time, the S&P Global Purchasing Managers’ Index rose to 53.9, signaling a return of private sector activity to expansion territory. Despite the positive data, political pressures and the Labour Party’s weaker standing in polls continue to pose risks to Reeves’ political future.