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Streaming giant Netflix is embroiled in a bidding war for Warner Bros.

Key Takeaways

• Streaming giant Netflix's new reported offer, said to be all cash instead of cash and stock, would appear to diminish the main theoretical strength of its rival's.
• Details of Netflix's potential offer landed after Paramount Skydance ratcheted up its hostile bid for Warner.

Cash is king. Investors tracking the streaming-media M&A saga of the moment may need to decide whose is more regal.

Streaming giant Netflix (NFLX) is reportedly considering an all-cash offer to acquire Warner Brothers Discovery (WBD), a change to its previous cash-and-stock bid that would appear to take a direct shot at Paramount Skydance's (PSKY) rival proposal.

News of Netflix's possible change dropped after Paramount Skydance ratcheted up its hostile bid for Warner Bros. on Monday; the latest twist would appear to simplify the terms for shareholders weighing the two offers, though it was unclear exactly how much Netflix might offer in a cash-only deal, which hasn't been announced. Neither Paramount nor Netflix responded to Investopedia's query in time for publication.

Why This Matters to Investors

Industry consolidation has historically led to higher prices—not great news for consumers who have been paying more and more for streaming services in recent years. That's one of the concerns some have about what might happen if Warner Bros. Discovery gets pulled into another company.

Netflix's stock climbed after Bloomberg first reported that the company was working on revising the terms of its acquisition late Tuesday. Its stock is down more than 1% so far today and is at its lowest price since it and Warner announced their agreement in early December. Paramount's stock, down just under 1%, is also near lows struck after the company muscled in.

To recap: Shortly after Netflix announced its cash-and-stock deal to purchase Warner Bros. in December, Paramount Skydance made its own offer public, saying its all-cash bid was better than the streaming company's cash-and-stock one. It has since been campaigning to bring shareholders to its side, and amended its proposal to address some of the reasons Warner outlined for rejecting it in private negotiations.

On Monday, Paramount ratcheted up the pressure, saying it intended to nominate directors for election at Warner Bros.' annual meeting and that it would solicit votes against the Netflix agreement. The company also sued Warner Bros. that same day for more information about its deal with Netflix.

If Netflix's all-cash offer materializes, Paramount may have to come up with a different argument for why shareholders should choose its proposal, or lean on its other points—mainly, it argues, a faster timeline and greater certainty of closing.

In the meantime, some investors are happy with the possibility of more cash on the table, as well as more competition for Warner Bros. “We’re pleased with the bidding war here,” Oakmark fund manager Bill Nygren told CNBC on Wednesday.

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China’s investigation of Trip.com comes amid growing scrutiny of tech companies by Chinese regulators.

Key Takeaways

• Trip.com shares tumbled Wednesday after Chinese regulators said they are investigating the company for potential monopolistic behavior.
• The Singapore-based online travel company said it would comply with the investigation.

An investigation by Chinese authorities sent a travel stock tumbling Wednesday.

U.S.-listed shares of Trip.com (TCOM) were down nearly 17% in recent trading after China's State Administration for Market Regulation said it's investigating the company over potential monopolistic behavior as a dominant travel player in the region.

Trip.com said in a statement that it will cooperate with the investigation and is operating its business as usual.

Why This Matters to Investors

The probe into Trip.com comes amid growing scrutiny of tech companies by Chinese regulators, raising concerns about possible fines or other disruptions in the company's operations.

Chinese regulators have been paying closer attention to the operations of large tech companies in recent years. Last year, regulators in the country found that Nvidia (NVDA) had violated antitrust law with a previous acquisition after announcing an investigation in December 2024.

Last week, Chinese authorities said they would look into Meta Platforms' (META) acquisition of AI startup Manus announced last month, to ensure it is compliant with Chinese export laws.

With Wednesday's losses, Trip.com shares are down 14% for the year so far after climbing about 5% in 2025.

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"We are bullish on the U.S. economy in 2026," Bank of America Chief Brian Moynihan said Wednesday

Key Takeaways

• Brian Moynihan, CEO of Bank of America, said he expects "further economic growth in the year ahead," though with "any number of risks" looming.
• His comments were similar in tone to those from JPMorgan Chase's Jamie Dimon, shared yesterday.

A second big-bank CEO in as many days is sharing upbeat sentiment about the U.S. economy.

Bank of America's (BAC) Brian Moynihan on Wednesday said while reporting the bank's latest quarterly financial results that he expects "further economic growth in the year ahead."

The statement followed comments yesterday from JPMorgan Chase (JPM) chief Jamie Dimon, who referenced a "resilient" economy but also highlighted a set of "hazards," including inflation and geopolitical risks, that he thought markets were underappreciating.

"With consumers and businesses proving resilient, as well as the regulatory environment and tax and trade policies coming into sharper focus, we expect further economic growth in the year ahead," Moynihan said in a statement. "While any number of risks continue, we are bullish on the U.S. economy in 2026."

Why This Matters to Investors

Broadly speaking, Wall Street's outlook for 2026 remains bullish, with many banks expecting stocks to continue their rise this year. Still, several experts warn of the possibility of volatility along the way. Here's Investopedia's preview of what could happen with the stock market this year.

This week brings several new economic readings, including today's reports on retail sales for November, which rose year-over-year, and wholesale inflation, which ticked higher between September and November.

Tuesday's release of the December CPI report on consumer inflation showed the measure rising 2.7% year-over-year, in line with what economists expected.

Bank of America said fourth-quarter net income, revenue and net interest income—the profit earned on the bank's credit products minus the interest paid to depositors—all rose.

Meanwhile, other major U.S. banks are reporting this week. Wells Fargo (WFC) and Citigroup (C) also reported Wednesday; Goldman Sachs (GS) and Morgan Stanley (MS) are due to announce Thursday, as is financial services giant BlackRock (BLK).

Bank of America's shares were down more than 4% late Wednesday morning. The KBW index of big banks, meanwhile, was off 1.3%. Read Investopedia's full coverage of today's trading here.

News of the day for Jan. 14, 2026

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Stocks lost ground on Tuesday, after two straight sessions of record highs for the Dow and the S&P 500.

Stock futures are pointing to a lower open as investors digest earnings reports from major banks; Bank of America, Wells Fargo, and Citigroup each released quarterly results this morning; Netflix is reportedly preparing to make its offer for Warner Bros. Discovery all-cash to speed up the transaction; gold and silver prices each set new record highs this morning; and investors will be keeping an eye on economic data releases and scheduled comments from several Federal Reserve officials. Here's what you need to know today.

Stock Futures Slip as Investors Digest Bank Earnings

Stock futures are pointing to a lower open as quarterly earnings reports from major financial institutions roll in. Futures tied to the Dow Jones Industrial Average and S&P 500 were recently down 0.3% and 0.4%, respectively, while those linked to the tech-centric Nasdaq dropped 0.5%. Each of the major indexes closed lower on Tuesday—after two straight sessions of record highs for the Dow and S&P 500—as investors reacted to earnings from JPMorgan Chase (JPM) and Delta Air Lines (DAL), along with a slightly cooler-than-expected inflation reading for December. Gold futures were up 1% at $4,645 an ounce, once again trading at record highs. (more below) Crude oil futures were up 0.6% at $61.55 per barrel, at their highest level since October. Bitcoin was at $95,000, little changed from yesterday afternoon, while the yield on the 10-year Treasury note ticked lower to 4.16%.

Bank of America, Citigroup, Wells Fargo Report Results

The earnings reporting season is kicking into high gear with the release this morning of quarterly results from several big banks. Bank of America (BAC) and Citigroup (C) topped Wall Street expectations, while Wells Fargo (WFC) fell short of analysts' estimates. "With consumers and businesses proving resilient, as well as the regulatory environment and tax and trade policies coming into sharper focus, we expect further economic growth in the year ahead," Bank of America CEO Brian Moynihan said. All three stocks, and others in the banking sector, lost just over 1% on Tuesday after mixed results from JPMorgan dragged on the stocks. Financial stocks also had a rough start to the week, with several banks and credit card issuers sinking Monday after President Trump over the weekend said he would start pushing for a cap of 10% on credit card interest rates later this month. Shares of Bank of America and Wells Fargo were recently down about 2%, respectively, while Citigroup stock added 2%.

Netflix Considers Converting WBD Offer to All Cash, Reports Say

After reaching a $72 billion cash-and-stock deal to acquire Warner Bros. Discovery (WBD) last month, Netflix (NFLX) is now considering converting its offer to an all-cash takeover, Bloomberg reported Tuesday afternoon. The change would be designed to streamline the deal process and help it be completed faster, Bloomberg reported, as Netflix and Warner Bros. have faced pushback from politicians and Paramount Skydance (PSKY), which is reportedly set to launch a proxy fight over its takeover bid not being considered as much as the company thinks it should be. Paramount Skydance's offer has been all cash from the beginning, with Oracle (ORCL) CEO Larry Ellison personally guaranteeing just over $40 billion of the deal's financing. Warner Bros. has repeatedly told shareholders that the Netflix deal is superior, and that Paramount's offer should be rejected. Netflix shares were up more than 1% ahead of Wednesday's opening bell, while Paramount and Warner Bros. were little changed.

Gold and Silver Hit Fresh Record Highs

Gold and silver futures each hit record highs early Wednesday, extending rallies fueled recently by renewed concerns over the Federal Reserve's independence and optimism that interest rates could be cut if inflation remains under control. Geopolitical and economic uncertainty helped drive gold and silver to a number of record highs last year. The U.S. military strike in Venezuela and news that the Department of Justice is investigating Fed Chair Jerome Powell have helped underpin the latest leg of the rally. Gold futures were up 1% at $4,645 an ounce recently, while silver futures surged more than 6% to around $92 an ounce.

Economic Data, Comments from Fed Officials in Focus

After Tuesday's Consumer Price Index reading came in slightly lower than expected, investors get a new slate of economic data to evaluate on Wednesday. The Bureau of Labor Statistics released data for November on retail sales and wholesale inflation, reports that were delayed owing to the government shutdown in the fall. The retail sales numbers were slightly stronger than expected, while producer prices rose less than analysts anticipated. New home sales figures for the month of December will also be released, and several Federal Reserve officials are on the calendar at a number of economic conferences. Investors are following the economic data and the comments from Fed officials closely as they look for clues on whether more interest rate cuts are coming.

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Software stocks lagged the market for a second straight year in 2025.

Key Takeaways

• Software stocks underperformed the broader market for a second straight year in 2025 as concerns about AI disruption weighed on investor sentiment.
• Analysts at Oppenheimer downgraded shares of Adobe, which exemplifies some of the major challenges facing the application software industry.

Software was once the hottest industry on Wall Street. Not so in the AI era.

S&P 500 software stocks lagged the broader index for the second consecutive year in 2025 as companies making the “picks and shovels” of the AI buildout—like semiconductors and memory devices—led the stock market higher. And analysts expect the challenges weighing on software stocks, especially application developers, to persist in 2026.

One example: Oppenheimer on Tuesday downgraded Adobe (ADBE) stock to “Perform” from “Outperform” and withdrew its price target entirely, citing threats from AI that apply to varying degrees across the application software industry. The news pulled Adobe, shares of which have lost more than a fifth of their value over the past 12 months, down more than 5% on Tuesday.

Why This Matters

Software stocks were expected to have a strong 2025 supported by the deployment of AI agents. The rollout of those agents has moved much slower than expected, weighing on investor sentiment and raising concerns about the software industry's vulnerability to AI disruption.

One of the primary issues Adobe faces, according to Oppenheimer, is the perception that AI is weakening its competitive position. Gen AI “is increasing the velocity of content creation while lowering price and subscriber growth,” wrote analysts led by Brian Schwartz. The company faces new competition from LLM providers like OpenAI and advertising platforms like Meta, which have introduced creative tools that allow people other options for doing what previously required an Adobe license and specialized knowledge. 

Investors also worry that generative AI could upend the seat-based pricing model on which many software-as-a-service providers like Adobe are built. Traditionally, Adobe sells a client a set number of Creative Cloud licenses for a set amount of time, which has meant reliable revenue. It and other software companies will have to adapt if the usage-based pricing—in which a customer pays each time they use a service—favored by AI developers and hyperscalers becomes the norm. 

Even if seat-based models remain standard, AI threatens to undercut software subscription growth by helping companies to get by with smaller teams and lowering the cost of switching vendors, according to a recent Deutsche Bank note. 

AI isn’t seen as a threat to all software companies. Infrastructure software stocks performed well last year as companies accelerated IT modernization and cloud migration efforts as they sought to transition to more AI usage, according to Deutsche Bank.

Shares of data analytics software provider Palantir (PLTR) more than doubled in value last year as its commercial sales soared. Cloud migrations also helped support shares of companies like MongoDB (MDB) and Snowflake (SNOW).

Morgan Stanley analysts expect many of the trends that fueled last year's infrastructure software rally to carry into 2026. They argue the rollout of AI copilots and agents should support demand for data management and observability tools, as should robust cloud growth.

Cloud and AI spending are expected to remain top priorities for companies this year. Cloud spending growth is expected to hold steady at 10%, according to a Jefferies survey of IT executives and chief investment officers. That survey also found that, on average, nearly 12% of IT budgets will be dedicated to AI this year, up from 6.5% last year.

Adobe's stock is down more than 50% since peaking in 2021. About half of the analysts with current ratings tracked by Visible Alpha rate Adobe stock a “Buy,” while two are neutral and three recommend selling. The average price target near $392 represents 26% upside from Tuesday’s close.

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Delta says low profit margins on main cabin fare is weighing on the industry.

Key Takeaways

• One way or another, Delta President Glen Hauenstein said, the prices of main cabin airfare are likely to rise because their low profit margins are putting pressure on carriers.
• Delta reported that revenue from "premium" tickets surpassed revenue from basic tickets in the fourth quarter.

Basic airfares may not stay at current prices for long.

The price of domestic, main cabin seats will likely increase as air carriers adjust to remain viable, Delta Air Line (DAL) President Glen Hauenstein said. Airlines, including Delta, are losing money on the act of transporting passengers, instead profiting from ancillary services, such as co-branded credit cards. And losses tend to be larger in the main cabin, so carriers focused on that segment are under more pressure than Delta, Hauenstein said on a conference call about the company's fourth-quarter results.

"At some point, this is going to shift," Hauenstein said Tuesday, according to a transcript made available by AlphaSense. "That's just how the math has to work."

Delta's fourth-quarter earnings came in slightly below analysts' expectations, and the carrier released a more restrained profit forecast than Wall Street anticipated.

Why This News Matters to Consumers

Reduced main cabin capacity may impact more than prices. Operational shifts and consolidation could result in specific flights being offered on fewer days or at fewer times.

Bookings hit a weekly record in early January, with premium ticket and business travel picking up, Delta CEO Ed Bastian said. Still, a number of developments have made tracking travel demand difficult, including caps on flight traffic during the government shutdown in November and recent storms, the company said.

Sales have been sluggish for the low-cost seats often purchased by those on a budget, Delta and other carriers have said, while purchases of first-class and international tickets have held up as wealthier Americans' appear less sensitive to economic pressure. Delta's "premium" ticket revenue hit $5.7 billion in the fourth-quarter, topping the $5.6 billion from basic tickets.

Airlines including Delta and United Airlines (UAL), are reducing their main cabin capacity. Two budget carriers, Sun Country  (SNCY) and Allegiant Travel Company (ALGT), plan to tackle the challenging environment by merging. More operational shifts are likely, Bastian said.

"It's taken a long time, but it's happening," Hauenstein said. "It's happening with capacity reductions. It's happening with consolidation, and it will continue to happen around us until main cabin returns accelerate."

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Intel shares hit their highest point in nearly two years on Tuesday

Key Takeaways

• Intel and AMD shares surged Tuesday after KeyBanc analysts upgraded the stocks, pointing to signs of strong AI demand. 
• The analysts said their checks suggest both chipmakers have nearly sold out of their expected 2026 capacity for server CPUs, and are considering raising prices.

A pair of chipmakers were among the top performers in the S&P 500 and Nasdaq Tuesday after the stocks won fresh bullish calls on Wall Street.

Shares of Intel (INTC) were up nearly 9%, and Advanced Micro Devices (AMD) surged over 6% in recent trading even as broader markets declined, after KeyBanc analysts upgraded the stocks to "overweight," citing stronger-than-expected demand for the chipmakers' AI products.

The analysts said their research suggests both chipmakers have "largely sold out" of their expected 2026 capacity for server CPUs used in data centers. Both are also considering raising their prices by 10% to 15% thanks to the overwhelming demand, the analysts said.

Why This Matters to Investors

The upgrades could help boost confidence in shares of Intel, which has struggled to turn around its business, and AMD, long seen as chasing the success of rival Nvidia.

The analysts raised their estimates for how much Intel and AMD could ship this year, and said that their evaluation of Intel's new "18A" production method was "enough to convince us it could credibly be the #2 foundry supplier in the industry," behind Taiwan Semiconductor Manufacturing Co. (TSM).

However, KeyBanc's support for Intel stands out on Wall Street. It's the only firm tracked by Visible Alpha recommending buying the shares, compared to five "hold" ratings and two "sell" ratings. KeyBanc's Street-high target of $60, suggesting 36% upside from Monday's close, is also well above the consensus at $41.

Analysts are more widely bullish on AMD, with the 10 current ratings tracked by Visible Alpha split between seven "buy" and three "hold" recommendations. KeyBanc's price target of $270, implying a rise of 30% from Monday's close, is roughly in line with the analyst mean.

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President Donald Trump has said that tariff rebate checks could come towards the end of 2026, later than the timeline he previously suggested.

Key Takeaways

• President Donald Trump says that tariff “dividend” checks may go out “towards the end of the year,” potentially extending the timeline for the rebates.
• In November, Trump had mentioned a potential timeline for the middle of the year.
• Trump has also raised questions about whether he needed congressional approval for the checks, saying that revenue was coming in “from other sources.”

Tariff rebate checks for Americans worth $2,000 each are still on the agenda, according to President Donald Trump, but they may be coming months later than previously thought. Trump also believes he may not need an OK from Congress to send the checks, potentially making it easier to overcome lawmaker opposition to the program.

“That’s coming in, that I’ll be able to do $2,000 sometime. I would say toward the end of the year,” Trump said in an interview with The New York Times published Sunday.

In early November, Trump wrote on his Truth Social platform that he would distribute a $2,000 tariff “dividend” to Americans from the revenues generated by tariffs. Trump has said that the tariff rebate checks would be restricted to low- and middle-income earners, which Treasury Secretary Scott Bessent has speculated could be limited to people with incomes of no more than $100,000. 

Trump in mid-November told reporters that the checks would be issued "somewhere prior to probably in the middle of next year, a little bit later than that."

Why This Matters

Tariff rebate checks would directly put cash into household budgets, potentially boosting consumer spending and providing a lift to the economy.

Trump Says Tariffs Bringing in More Than Reports Indicate

With the introduction of several new tariffs last year, including a sweeping round of ”reciprocal tariffs” in August, revenues from import taxes more than doubled to come in at $216 billion in the 2025 fiscal year, according to U.S. Customs and Border Protection. But economists have said that the tariff rebate checks would likely cost more than that, with projections ranging from $279 billion to $600 billion, depending on how the checks are distributed.

Trump has said that tariffs are bringing in more than is being reported. During his interview with The New York Times, Trump argued that tariffs are also generating economic growth that is not being looked at by economists. 

“We have taken in, and will soon be receiving, more than 600 Billion Dollars in Tariffs,” Trump wrote on Truth Social on Jan. 5.

Some economists believe Trump is also counting the investments that some foreign countries have promised to the U.S. during tariff negotiations. 

“We’ve heard of these investment pledges that, you know, a country might invest a hundred billion or three hundred billion into the U.S. economy. That of course would be private sector investment, very different from tax collections that flow to the Treasury,” Erica York, vice president at the Tax Foundation, told PBS News Hour in November.

Trump Says Checks May Not Need Congressional Approval

The price of the program, at a time when the national debt exceeds $38 trillion, has led some lawmakers to question whether the tariff rebate checks should be issued. They've argued that revenues instead should be used to lower the budget deficit.

During his interview with The New York Times, Trump downplayed concerns that Congress could keep the checks from going out.

“No, I don’t believe we do. We have it coming in from other sources,” Trump said when asked if he would need approval from Congress for the tariff rebate checks.

The comment would contradict statements made by other White House officials who have said that Congress would need to act on the tariff rebate checks. 

“That's going to depend on what happens with Congress. Congress is going to have to send those money to those peoples,” National Economic Council Director Kevin Hassett told CBS News on Dec. 21.

The rebate checks could also be affected by an upcoming Supreme Court ruling on tariffs, which could strike down some of the tariffs and potentially put the funding source for the checks in jeopardy.

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L3Harris shares have added roughly a fifth of their value in 2026 so far.

Key Takeaways

• L3Harris shares climbed to a record high Tuesday after the company announced an investment in its missile solutions segment from the federal government.
• With that investment, L3Harris announced plans to spin off the division to its own public company in the second half of this year.

L3Harris (LHX) shares are rising to fresh highs Tuesday, thanks to a show of support from the U.S. government.

The shares were up about 3% at $350 Tuesday morning, leaving the shares on track to top Monday's record close after the defense contractor said it plans to spin off one of its divisions with backing from the federal government.

The U.S. government will invest $1 billion in L3Harris’ missile solutions business that will convert to equity once it has debuted on the public market in the second half of this year, the company said. L3Harris will retain a controlling stake in the business.

Why This Matters to Investors

L3Harris derives the bulk of its revenue from the U.S. government, and investors are likely to see its show of support for the company's missile solutions division as a promising signal for the business.

L3Harris said it has "significantly invested to transform and grow" the production capacity of the division since acquiring Aerojet Rocketdyne, and that the government's support will allow it to expand further. The missile solutions segment includes the production of solid rocket boosters that power weapons like the Tomahawk missile program.

With Tuesday's gains, shares of L3Harris have surged close to 20% in January so far. Other defense stocks have also rallied recently as President Trump called for higher spending on defense.

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Shoppers have been battling high prices for years.

Key Takeaways

• Inflation was cooler than expected in December as prices for used cars fell, driving down the overall inflation rate.
  
• However, food prices rose at their fastest pace in more than three years.
  
• Tariffs hurt less than expected, with prices for goods other than food and energy staying flat for the first time since May.
  

A key measure of inflation rose less than expected in December, offering some relief to household budgets strained by years of steep cost-of-living increases.

The Consumer Price Index rose 2.7% in December, the Bureau of Labor Statistics said Tuesday. That was the same annual increase as in November and matched forecaster expectations according to a survey of economists by Dow Jones Newswires and The Wall Street Journal. However, the core reading, which excludes the volatile prices for food and gas, rose 2.6% over the year, coming in below the median forecast for 2.8%.

What This Means For The Economy

More tame inflation reports could clear the way for the Federal Reserve to lower interest rates to help the faltering job market.

Inflation is still running above the Federal Reserve's goal of a 2% annual rate, but flat inflation is an improvement over 2025. The annual CPI reading climbed between April and September of last year, with economists largely attributing the price hikes to President Donald Trump's tariff campaign.

"Americans have waited for a long time since the pandemic, and now they’re starting to get relief on prices," David Russell, global head of market strategy at TradeStation, wrote in a commentary.

The details of the report had mixed news for household budgets despite the overall cooling inflation. A 1.1% monthly drop in used car prices and flat prices for new cars helped keep the overall inflation rate from rising. Filling up those cars costs less too, as gas prices fell 0.5%.

Tariff Impact Muted So far

Another bit of budget-friendly news came from a category called "core goods" which encompasses what can only be described as "stuff" as opposed to services, excluding food and energy. Core goods prices, the category most affected by tariffs, stayed flat for the first time since May after climbing steadily. In the pre-tariff era, core goods prices typically stayed flat or fell.

"Goods prices were very benign, which underscore the point that tariffs have had a far more muted impact on inflation than feared," James Knightley, chief international economist at ING, wrote in a commentary. "This is a remarkable story and suggests US retailers are squeezing their profit margins."

Food prices on the other hand, rose 0.7% over the month, the highest increase since September 2022, and shelter prices rose 0.4%, the same as in August and reversing a deceleration in September.

"There were still pockets of rapid price increases in December and little sign that inflation will slow rapidly from here," Scott Anderson, Chief U.S. economist at BMO Capital Markets, wrote in a commentary.

Tuesday's report was the first in months to be unaffected by the government shutdown in October and November. The BLS and other statistical agencies were mostly closed during the shutdown, so the bureau never released its monthly CPI report for October, and certain data from November was collected later than usual or was missing altogether, leading many economists to take November's data with a grain of salt.

Will Tame Inflation Pave Way For Fed Rate Cuts?

Tuesday's report did little to shift expectations about the Federal Reserve's next moves for its key interest rate, which influences borrowing costs on all kinds of loans. The Fed is still widely expected to keep its rate flat at its next meeting later this month according to the CME Group's FedWatch tool, which forecasts rate movements based on fed funds futures trading data. Fed officials have been debating whether to keep the fed funds rate higher for longer to combat inflation, or lower it to breathe some life into the increasingly shaky job market.

The Fed has lowered its key rate by a quarter-point at each of its last three meetings, although its current range of 3.5% to 3.75% is still at a level that some Fed officials consider high enough to be "restrictive," that is, slowing down inflation and the economy overall.

"Nothing in the December CPI report will change many minds on the FOMC on the inflation outlook, and we believe most will vote for a pause in rate cuts at the January meeting as they await more evidence of progress on the inflation front before continuing to normalize rates," Anderson wrote.

An Independent Fed Takes Center Stage

Further tame inflation reports in the coming months could clear the way for the Fed to cut rates more later in the year.

"With inflation fears fading, officials will feel freer to respond to downside risks to the labor market, should conditions deteriorate," Michael Pearce, chief US economist at Oxford Economics, wrote in a commentary.

However, inflation data, normally highly influential to financial markets, may take a back seat to other factors influencing Fed policy, namely, the Trump Administration's escalating efforts to force the independent central bank to lower rates dramatically.

 "Inflation prints are likely to shift from being a primary market trigger to more of a background constraint as the market becomes increasingly focused on the risks to Federal Reserve independence," Alexandra Wilson-Elizondo, global Co-CIO of multi-asset solutions at Goldman Sachs Asset Management, wrote in a commentary.