Weekly Economic Update for IGA Capital
- Joshua Hawley
- Feb 3
- 3 min read
Date: February 3, 2026 (Data as of February 2, 2026)
Good morning from Dubai!
The market experienced a soft end to the week despite equities initially reaching new highs. The Federal Reserve's decision to hold rates, coupled with concerns over Big Tech earnings and an unexpected hawkish-leaning Fed Chair nomination, spurred a notable risk-off tone. The Treasury yield curve steepened, while precious metals and crypto saw a sharp sell-off. Attention now turns to the crucial January employment data this Friday.
Key Market and Policy Developments
Federal Reserve: The FOMC voted to hold the Fed Funds Rate at 3.5%-3.75%. Chair Powell indicated policy is in a "wait-and-see" mode, with a majority content to pause amidst firm economic data and a stabilizing labor market. Dissenting votes favored a 25 basis point cut.
New Fed Chair Nominee: President Trump's nomination of Kevin Warsh, known for his hawkish reputation and focus on a smaller balance sheet, injected uncertainty. This news reversed the prevailing dovish market narrative, contributing to the broader risk-off environment and a sharp dollar rebound.
Rate Expectations: The market continues to price in rate cuts, with the implied Fed Funds Rate dropping to 3.416% by mid-year 2026 and 3.107% by the end of 2026. The most recent Fed Dot Plot median for year-end 2026 remained unchanged at 3.375%.
Equities & Commodities: The S&P 500 briefly topped 7,000 mid-week but quickly pulled back. Concerns over aggressive AI spending outpacing monetization were a primary catalyst for tech weakness. Geopolitical risk (US-Iran tensions) pushed Brent crude oil higher. The risk-off sentiment led to a dramatic sell-off in debasement assets, with silver suffering a historic intraday decline and gold falling over 12%.
Fixed Income Update
Treasury Yields: The 10-year Treasury yield held steady within its recent 4.20%-4.30% range, finishing the week at 4.21%.
Yield Curve Steepening: The primary action was a "pronounced steepening" of the yield curve, with both the 2s/10s and 5s/30s spreads steepening by over 8 basis points, driven by rising commodity prices and the perceived hawkish tilt of the new Fed Chair nominee.
10-Year Forecast: The analyst median forecast for the Q4 2026 10-year Treasury yield is 4.18%.
Commodities Data
Commodity | Current Price | % Change (1 Month) | % Change (3 Months) | % Change (1 Year) |
Gold | $4,675.09 | 7.9% | 16.8% | 67.3% |
Silver | $80.39 | 12.4% | 67.4% | 154.6% |
Oil | $62.04 | 8.4% | 2.9% | -7.6% |
Copper/Gold Ratio (vs. 10yr UST) | (Chart shows a current value of approximately 0.260) | N/A | N/A | N/A |
Public Market Equity Indices
Index | Current Value | % Change (1 Month) | % Change (3 Months) | % Change (1 Year) |
S&P 500 | 6,939 | 0.9% | 2.2% | 13.8% |
Dow Jones | 48,892.5 | 1.6% | 3.7% | 8.5% |
Nasdaq | 23,462 | -0.1% | 0.0% | 18.3% |
Volatility Index (VIX) | 19.07 | 28.4% | -3.3% | 23.4% |
Bond and Fixed Income Returns
The below table shows the change in price percentage for select bond types (as of Feb 2, 2026):
Bond Type (Ticker) | Current Price | % Change (1 Month) | % Change (1 Year) |
Short-Term Treasury (VGSH) | $58.86 | 0.2% | 0.8% |
Intermediate-Term Treasury (VGIT) | $59.90 | 0.0% | 2.7% |
Long-Term Treasury (VGLT) | $55.73 | 0.1% | 0.1% |
Mortgage-Backed Securities (VMBS) | 47.24 | 0.5% | 3.6% |
High-Yield Corp. Bond (WEAX) | 5.55 | -0.2% | 1.6% |
REIT Performance
Sector | REIT (Ticker) | Current Price | Dividend Yield | Market Cap (000's) |
Multifamily | AvalonBay (AVB) | $176.65 | 3.96% | $25,012,039 |
Manufactured Housing | Sun Communities (SUI) | $127.43 | 6.3% | $15,759,063 |
Residential Mortgage | Annaly (NLY) | $22.84 | 12.26% | $16,143,716 |
Healthcare | Welltower (WELL) | $187.40 | 1.50% | $128,617,875 |
Storage | Public Storage (PSA) | $273.77 | 4.38% | $48,036,071 |
Best regards,
Joshua
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