NEW YORK, Jan 31, 2026, 16:02 EST — Market closed
- Shares last ended the session 0.44% higher at $115.71, as the U.S. market was closed for the weekend
- Trump’s pick of Kevin Warsh to head the Federal Reserve puts the spotlight back on interest rate expectations
- Looking ahead: January payrolls drop on Feb. 6; CPI follows on Feb. 11
Citigroup shares ended Friday 0.44% higher, closing at $115.71. (Bloomberg)
President Donald Trump announced Friday he has chosen former Fed governor Kevin Warsh to replace Jerome Powell as Federal Reserve chair when Powell steps down in May. For banks, expectations around interest rates directly impact net interest income — the gap between what they earn on loans versus what they pay on deposits. Warsh’s comments about reducing the Fed’s balance sheet add another layer of complexity. “Reforms, as they relate to the banks, will be a key focus,” said Gary Paulin of Northern Trust Asset Management. Peter Cardillo at Spartan Capital Securities described the pick as “kind of difficult to assess.” (Reuters)
Citigroup is still trimming expenses amid the ongoing rate debate. According to a source who spoke with Reuters, the bank plans to cut roughly 1,000 jobs as part of a two-year-old strategy to slash its workforce by 20,000. (Reuters)
Wall Street closed down Friday, with investors digesting the Fed-chair announcement amid ongoing concerns about earnings and inflation. The Dow dropped 0.36%, the S&P 500 slipped 0.43%, and the Nasdaq fell 0.94%. (Reuters)
Inflation figures offered no relief: the U.S. Department of Labor reported a 0.5% rise in producer prices for December, marking the largest increase in five months, fueled by higher services costs. The data suggested businesses are shifting tariff expenses onto consumers, leaving rate-cut timing—and long-term yields—uncertain for risk assets. (Reuters)
Big-bank stocks closed on a mixed note. JPMorgan Chase & Co. slipped slightly, while Bank of America Corp. and Morgan Stanley gained. Wells Fargo & Co. and Goldman Sachs Group, Inc. finished the day in the red.
Fed Vice Chair for Supervision Michelle Bowman said she continues to support rate cuts but voted to pause this week in order to collect more data. “The labor market is fragile,” Bowman noted, though she still expects three quarter-point cuts this year. (Reuters)
The United States slipped into what officials say will be a short government shutdown early Saturday as lawmakers failed to meet the midnight funding deadline. The House isn’t expected to address the spending bill until Monday, a Republican leadership aide said. (Reuters)
The setup is tricky. Should inflation prove stubborn, or if the shutdown drags on and delays data, traders might push rate-cut bets further out. That would raise funding costs and pressure bank shares. On top of that, Citi’s own cost issues could trigger bigger severance and restructuring expenses before any savings materialize.
The January U.S. employment report drops next week, scheduled for Feb. 6 at 8:30 a.m. ET. Then, the January CPI data arrives on Feb. 11. (Bureau of Labor Statistics)
