Headlines to Start the Week of Jan. 05, 2026

Why Markets Can Sit Out the Drama in Venezuela?

Despite how dramatic it sounds, the removal of Venezuela’s president hasn’t really shaken global markets, mainly because Venezuela just isn’t that important to the world economy anymore. Back in the 1970s, it produced about 3.5 million barrels of oil a day, roughly 8% of global supply, and made up 1% of global GDP. Today, it produces only about 1 million barrels a day, or 1% of global output, ranks 18th among oil producers, and accounts for just 0.1% of global GDP. Years of mismanagement under Chávez and Maduro led to hyperinflation and a 70% collapse in real GDP, leaving the country economically broken long before this latest shock. With oil markets already well supplied and Venezuela’s production infrastructure still running, there’s little immediate risk to prices. So for investors, this is more of a grim confirmation of how far Venezuela has fallen than a crisis with real global consequences.

Source: Bloomberg Opinion (John Authers)

Minneapolis Fed’s Kashkari indicates interest rates don’t need to be cut much more

Minneapolis Fed President Neel Kashkari said the Federal Reserve is likely close to being done cutting interest rates, as officials try to decide whether slowing job growth or still-elevated inflation is the bigger risk. “My guess is we’re pretty close to neutral right now,” he said on CNBC, noting that the policy rate sits at 3.5%–3.75%, only about half a percentage point from what the Fed considers neutral. Kashkari said inflation, currently 2.8% on the Fed’s preferred core measure, remains “too high,” especially with the risk that tariffs could push prices up for years, even as unemployment has risen to 4.6%. He added that the economy’s resilience suggests policy may not be as restrictive as once thought, but stressed the Fed now needs more data before moving again. As a voting member of the committee this year, Kashkari’s cautious stance carries weight, and he also said he would be happy to see Jerome Powell remain at the Fed after his chair term ends, calling his overall performance “excellent.”

Source: CNBC

Dalio: 2025 Wasn’t About AI—It Was About the Value of Money

Ray Dalio argues that while many people remember 2025 as the year US stocks and AI dominated, the real story was the decline in the value of money and a major shift away from US assets. The dollar fell sharply—down 12% against the euro, 13% against the Swiss franc, and 39% versus gold—making US market returns look much stronger than they really were. Gold was the standout performer, rising 65% in dollar terms, far ahead of the S&P 500’s 18%, which actually dropped 28% when measured in gold. US stocks also lagged global markets, underperforming European stocks by 23%, Chinese stocks by 21%, and emerging markets, which gained 34%. Dalio says bonds and cash were poor real investments once currency effects are considered, while stretched valuations, low equity risk premiums, and tight credit spreads suggest future returns will be limited. He also points to aggressive US fiscal policy, rising protectionism, and geopolitical tensions as drivers of capital moving toward diversification and gold, concluding that markets are now expensive and that the big forces shaping the outlook remain money and debt, politics, geopolitics, climate, and technology—all unfolding within what he calls the “Big Cycle.”

Source: X (Ray Dalio)