Headlines Change. The Plan Holds.
February is often when the “new year energy” meets real life. Goals get tested, routines settle in, and the world gets noisy again—markets included. Over the last few months, investors have been navigating a meaningful shift in expectations: interest rates are no longer falling quickly, equity leadership has been rotating, and some of the most volatile assets—crypto and precious metals—have experienced sharp pullbacks.
At Strategic Income Group, we don’t view volatility as a reason to abandon the plan. We view it as a reminder of why the plan exists.
The Fed: Rates on Hold, and Leadership in Transition (Not Yet Final)
The Federal Reserve held the target range for the federal funds rate at 3.50%–3.75% at its January 28 meeting, signaling “careful” assessment of incoming data and the balance of risks.¹
At the same time, there has been significant attention on Fed leadership. President Trump has nominated Kevin Warsh to be the next Fed Chair, but that nomination requires Senate confirmation, and the current Chair remains in place until the transition occurs.² In other words: leadership change is a developing process, not a completed event—so markets are left interpreting potential outcomes rather than reacting to finalized policy shifts.
What this means for investors: expect continued sensitivity to Fed communication, inflation progress, and employment trends. The “rapid cuts” narrative has faded, replaced by a more measured approach—patience over urgency.¹ ³
Equity Volatility and Rotation: A Reminder, Not a Surprise
Recent equity volatility has been driven by a combination of shifting rate expectations, earnings reassessments, and broader uncertainty. In environments like this, markets often do what they’ve done historically: leadership rotates.
Over the last several months, there have been signs of rotation toward more established, cash-flow-oriented businesses (often described as blue chips and dividend-oriented exposures), alongside improving relative interest in small caps. This has shown up in the small-cap space with value outperforming growth in 4Q 2025—a notable pattern that reflects how investors sometimes seek durability and breadth after periods of concentrated leadership.⁴ ⁵
Important caveat: rotation is not a promise. It can reverse quickly, and it may not persist. The takeaway isn’t “chase what’s working”—it’s “stay diversified so you’re not dependent on a single narrow market narrative.”
Crypto and Precious Metals: Pullbacks Can Create Long-Term Opportunity
Bitcoin and broader crypto markets have experienced a significant drawdown from late-2025 highs, with major outlets noting bitcoin’s decline toward the low-to-mid $60,000s in early February and a roughly ~50% drop from its October 2025 peak.⁶ ⁷
Precious metals have also been volatile. Reuters reported that CME increased margin requirements for COMEX gold and silver amid sharp swings, underscoring how quickly volatility can rise in these markets.⁸ Other commentary in late January highlighted notable pullbacks in metals alongside broader repricing of liquidity expectations.⁹
At SIG, our posture on assets like Bitcoin and precious metals (when appropriate for a client) remains consistent:
- These are high-volatility allocations by nature.
- They should be approached with a long-term time horizon (often 7+ years), not a short-term expectation.
- In that context, sharp pullbacks can represent an opportunity—not because prices “must” rebound quickly, but because volatility is the admission price for long-term participation.
Geopolitics: The Wildcard That Can Move Markets Quickly
Even when the economic data is stable, markets can react sharply to geopolitical uncertainty—whether that’s conflict risk, trade disruptions, energy supply concerns, or broader policy shifts. The point isn’t to forecast headlines. It’s simply to recognize that geopolitics can create short, fast volatility across stocks, rates, commodities, and crypto—often without warning.
That’s another reason we prioritize planning and diversification over prediction.
What Should SIG Clients Do With All of This?
In a 24-hour news cycle, investors are constantly tempted to respond—move to cash, change allocations, “wait for clarity.” But clarity usually arrives after markets have already moved.
The answer is almost always the same: stick to the plan that already assumes volatility will happen. Your financial plan is designed to weather multiple environments—higher rates, lower rates, market rotations, pullbacks, and recoveries—without requiring dramatic changes every time the storyline shifts.
If you’re wondering whether anything should change, the best step is not reacting to headlines—it’s revisiting your plan:
- Are your allocations still aligned with your time horizon and goals?
- Do you have the liquidity and reserves you need?
- Are you taking the right amount of risk for your season of life?
If you don’t have a review on the calendar, we encourage you to schedule time with your SIG Financial Planner. A short check-in can provide clarity and confidence—especially when markets feel unsettled.
References
- Federal Reserve Board, FOMC Statement (Jan. 28, 2026): target range maintained at 3.50%–3.75%.
- Reporting on nomination of Kevin Warsh as next Fed Chair and confirmation requirement / timing tied to Powell term ending (May 2026).
- J.P. Morgan Insights, “Fed leaves rates unchanged to start 2026…” (Jan. 29, 2026).
- Franklin Templeton / Royce Investment Partners: 4Q25 small-cap value vs growth outperformance context.
- Royce Investment Partners small-cap recap (additional context on small-cap style leadership).
- The Guardian: bitcoin slump and magnitude of decline from prior highs (Feb. 5, 2026).
- Barron’s: bitcoin below $70k / ~$63k area and ~48% off October 2025 high (Feb. 5, 2026).
- Reuters: CME margin hikes for gold/silver amid volatility (Feb. 6, 2026).
- Fortune: late-January repricing across bitcoin and metals (Jan. 30, 2026).
Compliance Disclosures
This commentary is provided for informational and educational purposes only and should not be construed as investment, tax, or legal advice. The views expressed reflect market and economic conditions as of the date noted and are subject to change without notice. Past performance is not indicative of future results. Diversification and asset allocation do not ensure a profit or protect against loss.
Strategic Income Group is an SEC-registered investment adviser. Registration does not imply a certain level of skill or training. For additional information, please refer to our Form ADV available at www.adviserinfo.sec.gov.
