President Trump chose a Federal Reserve chair he thinks he can count on to lower interest rates. History suggests three different ways presidents have come to regret that bet. Meanwhile, many on Wall Street are bracing for an unpleasant surprise when January’s inflation numbers land on Friday. In recent years, inflation in January has tended to come in relatively hot. On the jobs front, the pace of hiring in America has dropped precipitously, and there isn’t a single reason why. Instead, there are a lot of them.

The experiences of three U.S. presidents offer a road map for how Kevin Warsh’s Fed chairmanship could unfold—for President Trump and the nation. The chair could deliver the lower rates the president wants and unleash inflation, which is what happened to Richard Nixon with Arthur Burns. He could be loyal but unable to bring his colleagues along, as Jimmy Carter discovered with G. William Miller. Or he could turn independent and raise rates against the president’s wishes, as Harry Truman learned with William McChesney Martin Jr.

Last year, the consumer-price index, which tracks the cost of basket of goods and services, rose more in January than in any other month. The same thing happened in 2023. January wasn’t the hottest month for inflation in 2024, but it was close.

Speaking at the Brookings Institution in Washington on Friday, Jefferson acknowledged that inflation has stalled above the Fed's 2% target, but said he expects progress on declining inflation to resume later this year. Meanwhile, the economy looks broadly healthy, likely to deliver roughly 2.2% growth in 2026, he estimated. (Dow Jones Newswires)

Daly said that in many ways, the disconnect makes sense as we have been in a relatively low-hiring, low-firing environment for some time. For the future of policy, she said the Fed must watch both sides of their mandate and Americans deserve both price stability and full employment. (DJN)

Uncertainty over tariff policy has made it difficult for many companies to plan ahead, leading them to hold off on hiring. For some—particularly small businesses—tariffs have raised costs, making it more difficult to take on new employees. High short-term interest rates are another pressure, particularly for smaller firms. Tech companies that hired heavily in the wake of the pandemic are still dealing with an overhang of workers. Another factor: Workers aren’t leaving the jobs they have.

One thing remained constant, though: Americans are as laser-focused on prices as they were before President Trump took office. The high cost of living was the No. 1 economic complaint Americans cited in interviews with The Wall Street Journal.

Delayed U.S. jobs and inflation data will be the focus this week as investors gauge when the Federal Reserve is likely to cut interest rates again. In Europe, eurozone and U.K. gross domestic product data will be watched, while in Asia a week packed with key growth data and political developments lies ahead.

7 a.m.: ECB’s Philip Lane gives lecture at Maynooth University in Ireland
10 a.m.: U.S. employment trends index
11 a.m.: ECB’s Christine Lagarde participates in plenary debate on the state of the EU economy and ECB activities in Strasbourg, France
1:30 p.m.: Fed governor Christopher Waller speaks on digital assets at Global Interdependence Center Summit in La Jolla, Calif.
5 p.m.: Fed governor Stephen Miran speaks on WBUR Boston podcast

6 a.m.: NFIB index of small-business optimism
8:30 a.m.: U.S. retail sales
8:30 a.m.: U.S. import & export price indexes
8:30 a.m.: U.S. employment cost index
8:55 a.m.: U.S. Johnson Redbook retail sales index
11 a.m.: Federal Reserve Bank of New York Q4 household debt and credit

• President Trump spent much of last year courting foreign investment in U.S. factories, promising to replace jobs lost to the global economy. The rise of a Chinese automotive glass plant in the Ohio heartland shows the risks when America’s biggest rival sets up shop.
• Canada’s economy shed jobs for the first time in five months to kick off the year, though the unemployment rate still fell sharply as fewer people looked for work.
• Japanese Prime Minister Sanae Takaichi led her party to a thumping victory in parliamentary elections, handing her a powerful mandate to deepen ties with the U.S. and rev up Japan’s economy.
• China’s foreign-exchange reserves rose in January amid a weaker dollar, as a strengthening yuan raises concerns around its potential impact on Chinese exports. (Dow Jones Newswires)
• Taiwan’s exports showed no signs of slowing at the start of 2026, rising at the fastest pace in 16 years for the first month of the year as AI demand continues unabated.
• Uganda's central bank maintained its key lending rate at 9.75%, citing rising inflationary pressure and high oil prices amid sustained geopolitical uncertainty. (DJN)

WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ’s global team of reporters and editors. This newsletter was compiled by Michael Maloney in New York and Nihad Ahmed in Barcelona.