Mid-January Outlook: The Big Volatility Window Has Arrived

If the initial rebound at the beginning of the year was just a “test the waters,”
then this week into next week will be the stress test to determine whether the spring market can establish itself.
Several events from last week indeed helped support the market:
‍#美股 The three major indices closed higher
‍$BTC BTC rebounded slightly
Risk appetite is warming up
But don’t celebrate too early.
Mid-January has always been a time when bulls and bears are most likely to clash head-on.
1️⃣ Powell Criminal Investigation: Not to bring him to court, but to force him to step down
The U.S. Department of Justice has initiated a criminal investigation into Powell,
The market’s first reaction was—Is the Federal Reserve’s independence about to collapse?
But looking calmly:
Trump’s goal isn’t to send Powell to court,
But to exert continuous pressure so that after his term ends,
👉 Neither board members nor anyone else will stay, and he will leave the Fed entirely.
This is a political game, not a judicial finality.
But in the short term, emotional disturbances are very real for the market.
2️⃣ Tuesday CPI: Numbers are not important, structure is
On Tuesday evening, the December #CPI
Cleveland Fed’s real-time forecast:
👉 Year-over-year and month-over-month both below market consensus
But the biggest risk is:
👉 November CPI was distorted by the government shutdown, leading to a low base
What does this mean?
If December’s month-over-month slightly rises,
The market will immediately think of four words:
Inflation rebound.
Even if the long-term trend remains unchanged,
Short-term pricing will first take a hit before stabilizing.
3️⃣ Affordable Care Act Subsidies: One of the triggers for the government shutdown
Last week, the House passed a version:
👉 Subsidy extension for 3 years
Now the ball is in the Senate.
The Senate is drafting an alternative plan,
The name has already been announced:
👉 “Moreno–Collins Compromise Bill”
The draft will be announced tonight or tomorrow night.
The key point is only one sentence:
👉 Can the two parties reach an agreement?
If they do:
Risk is lifted
If they don’t:
👉 The probability of another government shutdown at the end of January increases significantly
The market fears not poor results,
But delays.
4️⃣ Supreme Court Tariff Ruling: The direction is set, details determine fate
Almost certain:
👉 Some tariffs are unconstitutional
The real disagreement lies here:
❌ Demand to cancel all reciprocal tariffs + refunds
👉 Chaos, fiscal pressure, market turbulence
✅ Maintain the status quo, but no further increases allowed
👉 Uncertainty decreases, benefiting risk assets
The outcome is not about “whether it’s unconstitutional,”
But whether to retroactively apply the ruling.
5️⃣ Earnings Season Begins: First look at banks, then AI
This week officially marks the start of earnings season.
Financial stocks lead the way:
Big bank earnings = a thermometer of the U.S. economy
Key focus:
👉 Trump’s push for “credit card interest rates not exceeding 10%,”
The actual impact on bank profits
On the tech side:
This week’s core is TSMC
Performance is likely to be good
But the market’s real concern is not computing power, but:
👉 When will AI be able to scale profitably?
This question will not disappear in the short term.
To sum up in one sentence:
Mid to late January
is the “qualification exam” for the spring market.
Any of these events
evolving in a negative direction
could trigger a significant wave of volatility.
So now is not the time to “close your eyes and rush in,”
but rather:
👉 Let the market endure the test first,
then discuss how far the trend can go.
Spring market is not impossible,
but it has never been a straight line.