WSJ Economy

From Davos to Minneapolis, the events of this month have the potential to profoundly change the political and economic landscape for years to come.

Focus will return to economics and monetary policy in the week ahead, with a Federal Reserve meeting likely to be the highlight of the days to come.

Canadians look to have been more cautious with their spending over the holidays, with retailers registering a pullback in trade for the final month 2025.

Consumers felt a bit better about the economy in January as sentiment lifted off from near-historical lows reached late last year, according to the University of Michigan’s monthly survey.

Business activity in the U.S. and a number of large economies across Europe and Asia picked up at the start of the year, with signs of a rebound in export orders as the global economy adjusts to the increase in U.S. tariffs.

Trump has repeatedly demanded the Fed lower interest rates, criticizing its Chair Jerome Powell for being too late to cut.

Households might have enjoyed some relief after the budget in November, in which the government avoided raising income taxes and outlined plans to reduce household energy bills.

The Bank of Japan’s first meeting of the year took place against a dramatic backdrop of bond market gyrations, worries about government policies and a volatile yen.

Consumer prices rose at a slower pace, reflecting the Japanese government’s measures and the peaking of food inflation.

Consumer sentiment rose slightly in January, though confidence over the U.K.’s economic outlook remains subdued.

Consumer sentiment in the eurozone improved slightly in January, but hopes for a rebound in confidence could be short-lived amid rising tensions between the U.S. and Europe.

The U.S. commerce secretary also criticized Canada’s move to further its trade relationship with China.

U.S. jobless claims ticked slightly higher last week but remain subdued, signaling little reason to fret that the labor market has worsened abruptly.

Some members of the governing council said at December’s meeting that there could be a case for erring on the dovish side.

Turkey’s central bank reduced borrowing costs for a fifth meeting in a row, cutting its benchmark rate to 37% from 38.0%.

Policymakers said inflation was still too high, with the underlying measure hovering around 3% and a restrictive monetary policy remained necessary.

Malaysia’s central bank stayed the course in its first meeting of the year, holding rates steady as the economy remains stable and external risks persist.

Asian stocks were mostly higher, after President Trump backed down on his threat of tariffs on European countries over their resistance to his Greenland plan.

Japan’s exports rose again in December in a further sign of corporate sector resilience, but a drop in goods shipped to the U.S. serves as a reminder of continued tariff and geopolitical risks.

The country’s unemployment rate fell in December on the back of hefty employment growth, underscoring the strength of the economy’s upswing in late 2025.