Axios

A major bet on Nicolás Maduro's capture before the Venezuelan president was seized in an American military raid shows how prediction markets pose a controversial new opportunity for insiders to profit on secret information.

Why it matters: Insider trading on the stock market is illegal, while insider trading on prediction markets is generally not — at least for now — and critics say that's a problem.

The Trump administration says it is freezing $10 billion in funds for child care and poor families in five blue states, the Office of Management and Budget confirmed to Axios Monday.

Why it matters: The White House is pointing to reports of social services fraud in Minnesota to threaten funding for child care around the country.

• Child care providers are bracing for a slowdown in funds and the possibility of cuts that threaten their ability to operate. That could create wider issues, as millions of parents rely on child care to get to their jobs.

Starbucks is kicking off 2026 by betting on viral Dubai chocolate-inspired beverages — alongside more protein-forward drinks.

Why it matters: The menu push is part of the coffee giant's broader turnaround effort to boost traffic and revive sales.

Private equity firm Apollo Global Management has quietly agreed to sell coin-exchange kiosk operator Coinstar to Arctic Slope Regional Corp., which manages investments for indigenous residents of northern Alaska.

Why it matters: Coinstar is a pillar of America's currency logistics, although its importance may diminish now that new pennies aren't being produced.

Tariff drama and tax cuts! AI spending and AI-spurred job losses! New Federal Reserve leadership! It is on track to be a big year across all the key policy areas of interest to economy-watchers.

The big picture: Seismic changes have been set in motion by the Trump administration's sweeping policy agenda and a mega-wave of investment in artificial intelligence — likely to determine the fate of the economy in 2026.

1. The AI economy

The biggest macro questions are whether the alarm bells about AI and the labor market will start to ring true — and whether the productivity effects move from just anecdotes to the economic data.

• Last year, much evidence pointed to AI as a marginal part of the labor market slowdown. Some economists (and officials inside the White House) argue that broader adoption of the technology would boost the labor market, at least in the short term.

Of note: AI spending buoyed economic growth, at least in the first nine months of 2025. It is also lifting the stock market, which might help support spending among wealthier consumers.

• Whether this turns out to be a bubble that pops — and the extent such a risk poses to the broader financial system as the Fed rolls back regulations — is the related theme to watch.
• That said, any correction in AI investment looks more likely to be a down-the-road story than a 2026 issue.

2. Tax cut boost

The One Big, Beautiful Bill Act, signed into law in July, is set to have its maximum economic punch in the early months of 2026, a likely tailwind for overall economic growth.

• But how large, how broad-based and how sustained that boost will turn out to be remains to be seen.

Zoom in: Fiscal policy is on track to add about 2.3 percentage points to first-quarter GDP growth, per data from the Hutchins Center Fiscal Impact Measure from the Brookings Institution.

• On the individual tax side, beneficiaries of policies like a deduction for tip income, Social Security payments and expanded deductibility of state and local tax are on track to generate super-sized tax refunds this spring,
• On the corporate side, businesses are enjoying new tax incentives for capital spending, especially on factories.
• Federal spending on immigration enforcement, meanwhile, is ramping up due to the legislation.

3. Trade uncertainty (maybe) resolving

Any day now, the Supreme Court will hand down a decision that might scramble the centerpiece of President Trump's economic agenda: the ability to impose huge tariffs unilaterally.

• If the court strikes down the bulk of Trump's tariffs, fiscal revenues could be put at risk, resulting in a chaotic refund process.
• That said, the ruling will help create some guardrails on what kinds of legal authority the president has to impose unilateral tariffs. That, in turn, could lead to a more stable tariff picture (albeit with much higher rates than pre-2025).
• While there are other authorities the president can use to enact tariffs besides the sweeping authority under the International Emergency Economic Powers Act he has claimed, they require a more deliberative process than the kind of whipsawing that importers faced last year.

4. Future of the Fed

Fed chair Jerome Powell's term is up in May, and Trump's selection of his successor is imminent, with Kevin Hassett and Kevin Warsh the leading job candidates.

Zoom out: Whoever takes the reins will face immense pressure from Trump to lower interest rates to rock-bottom levels — amid continued high inflation — and how they handle that pressure may determine the future of the central bank's independence from the White House.

• Trump expects the future Fed chair to consult with him on rates, while casting the intention to lower rates as a key qualification for the next leader.
• The question is whether the next Fed chair can resist that political pressure and whether financial markets believe that is the case. If bond markets lose confidence that the Fed will raise short-term rates if necessary to combat an inflation surge, it could paradoxically drive up long-term rates.
• Another huge question: the makeup of the influential Fed board, with the Supreme Court also set to decide whether Trump can fire governor Lisa Cook and, by extension, other Biden-appointed governors.

5. Affordability and the midterms

With voters going to the polls in November, the cost of living is emerging as a core battleground.

• Democrats seeking to take control of Congress are making political hay about the affordability crisis.
• Trump has called the term affordability a "con job," but said recently that he believes "pricing" will be a major election issue.

Flashback: The Consumer Price Index is up a moderate 2.7% over the last 12 months, but that increase came on top of the Biden-era inflation surge.

• The index is up 23.7% since January 2021, even more for some often-purchased subcategories, including groceries (up 24.6%).

Over the holiday break, the administration quietly shelved plans to impose levies on imported pasta and furniture.

• It's a hint that the White House is eager to avoid trade levies that might flow directly to prices consumers pay, as opposed to affecting input costs for businesses.

Silicon Valley's congressman is facing a revolt from some of his wealthiest constituents, and even could get primaried.

Why it matters: This is ground zero for the thorny politics of income inequality, which will become pervasive as the AI revolution mints more billionaires and costs "normies" their jobs.

Retail investors turned into net sellers in December, ending a three-month winning streak against the S&P 500, per Charles Schwab's Trading Activity Index, which tracks the retail trading activity of millions of customers.

The big picture: The selling was modest, which suggests that investors were repositioning to wrap 2025 rather than turning bearish and setting up for a year of active stock picking as the AI trade gets messier.

If you invested in the AI narrative — through Big Tech stocks, exposure to China, or allocation to precious metals that may benefit from expansion of the technology — you struck gold in 2025.

Why it matters: Investors are betting that the AI bubble won't pop in 2026, and stocks tied to the narrative can still rally.

The bigger market risk for investors to watch in the wake of the U.S. military action in Venezuela won't be Caracas, but Beijing, a market strategist says.

Why it matters: If China moves to protect its oil interests in Venezuela — especially by tightening rare earth exports that are critical to the AI trade — markets could turn lower quickly.

Ian Bremmer — president and founder of Eurasia Group, a top global political-risk research and consulting firm — says the top geopolitical risk for 2026 is the "U.S. Political Revolution," with President Trump "so committed to and so capable of changing the political system."

Why it matters: Eurasia Group's annual "Top Risks" report — out Monday, 48 hours after Trump shook the world by snatching Venezuela's Nicolás Maduro — isolates the "biggest threats to the trajectories of nations, industries and institutions," to help leaders and investors prepare for the year.

We're locked in the fastest, broadest, most consequential reordering of politics, tech and business of our lifetimes — and it's a global phenomenon.

Why it matters: The conventional wisdom is that everything is being disrupted everywhere. But we're actually experiencing the aftershocks of a decade of disruption in America and other advanced economies.

The era of post-disruption society has begun. The new, unfolding era is being shaped by rising inequality, mass migration and immigration, surging populism, fading trust and emerging AI.

• The good news: This is navigable for leaders, and everyone, if you understand this shared global phenomenon.

The leaders of Greenland and Denmark called on President Trump to stop threatening to take over the resources-rich autonomous territory that's part of the Danish kingdom.

The big picture: The calls come after Trump renewed his push to control Greenland during a Sunday interview with The Atlantic on the U.S. raid and ensuing capture of Venezuelan leader Nicolás Maduro in Caracas.

President Trump said Sunday the U.S. could launch a second strike on Venezuela if "they don't behave."

Why it matters: His comments came after Venezuela's interim leader, Delcy Rodríguez, struck a more conciliatory tone after Trump issued a warning to her following her earlier criticism of the U.S. attack and capture of Venezuelan President Nicolás Maduro.

Venezuela must remain an independent country, Pope Leo XIV said Sunday as he expressed concern for Venezuelans following the U.S. raid and ensuing capture of leader Nicolás Maduro in the South American country.

The big picture: President Trump said Saturday American officials will "run" Venezuela until a "proper transition can take place" following the attack on Caracas to capture Maduro, who's in U.S. custody and faces charges including narcoterrorism.