Axios

DAVOS, Switzerland — Surrounded by headlines about threatened tariffs and talk of a new global order, an American port official at an Axios House event last week put it plainly: "Our job is to remain resilient … be the adult in the room."

Why it matters: World Economic Forum attendees had front-row seats to fraying diplomatic relationships, deals and alliances.

Axios' Amy Harder and Dave Lawler spoke with Noel Hacegaba, CEO of the Port of Long Beach in California, and U.S. Ambassador to Greece Kimberly Guilfoyle. The conversations were sponsored by Tourise.

Driving the news: A chaotic four-day span in the global markets was capped by President Trump touting a "framework of a future deal" with NATO after announcing 10% tariffs on eight allies over his push for the U.S. to acquire Greenland.

• "What [President Trump] has done is use tariffs very successfully … as a negotiating tool, strategically, to be able to level the playing field," Guilfoyle told Harder.

What they're saying: "The only certainty really is uncertainty," Hacegaba said.

• "Our job is to remain resilient, to remain calm, be the adult in the room, and encourage our shippers and partners not to overreact, not to panic."

By the numbers: The Port of Long Beach generates "almost 3 million jobs across the country and moves $300 billion worth of goods each year," according to Hacegaba.

• Hacegaba said the port plans to double cargo volume by 2050.

The bottom line: "We have proven time and time again to be the strongest, smartest, most strategic ally flat out in the world globally," Guilfoyle said of the U.S.

Content from the sponsor's segment:

In a View from the Top segment, H.E. Ahmed Al-Khateeb, Tourise chairman and Saudi Arabia's tourism minister, emphasized the role travel plays in the global economy.

• Tourism represents "10% of the global economy" and "10% of global jobs — 357 million jobs," with 45% held by women and 80% by youth, he said.

Go deeper: Watch the full interviews on YouTube.

Tuesday marks the start of Southwest Airlines' assigned seating — a change that reshapes how millions of Americans fly.

Why it matters: Southwest is the last major U.S. airline to abandon open seating, closing a long-running chapter that set it apart from competitors.

Booz Allen Hamilton shares plunged Monday after the Trump administration announced it's canceling all Treasury Department contracts with the consultancy.

Why it matters: Government contractors are under growing scrutiny during Trump's second term, as the administration's push to root out "waste, fraud, and abuse" begins translating into real financial consequences.

Traders on major betting exchanges now assign top odds to BlackRock executive Rick Rieder to be President Trump's Fed chair nominee.

Driving the news: Rieder had 47% odds Monday morning on Polymarket, with former Fed governor Kevin Warsh second at 28%. Rieder's odds were below 3% on Jan. 12.

• The markets have been volatile through the last several weeks, reflecting shifting comments from the president about the nomination. White House economic adviser Kevin Hassett reached 85% odds in December and is now down to 9%, for example.
• The betting exchanges may be volatile, but they reflect real money being put at risk — $269 million on Polymarket and another $59 million on Kalshi.

Zoom in: Rieder, as the chief investment officer for global fixed income at BlackRock, is in an unusual position for a potential Fed chair, having published research notes on economic data, which offer insights into his thinking on major debates of the moment.

• In a note on jobs data released Jan. 9, for example, Rieder was clear that he believes a productivity surge is underway that is dampening demand for labor, and that the job market is weaker than headline data imply.

What they're saying: Rieder wrote that "if people question whether productivity is occurring in today's economy, we would point to a number of illustrations that require closer inspection than just the top-line payroll growth number, which has been slowing of late."

• He adds that "while U.S. growth is solid, broad-based labor is not really participating in this economic vitality," and that this justifies further rate cuts.

⚾️ Fun fact: Rieder is also a minority investor in Major League Baseball's Baltimore Orioles, of which he is said to be a lifelong fan.

The financial headlines overnight were full of speculation about currency interventions by the Japanese and U.S. governments. That's really a small piece of a bigger story — one with serious consequences for the global economy.

The big picture: Japan has played an outsize role in the global financial system over the last two decades, with its massive pile of low-interest debt and major institutional investors looking to deploy capital for higher returns.

• Those underpinnings are now coming into question. Should they unravel more fully, it could throttle capital inflows to the rest of the world and therefore lower asset values and lift long-term rates.
• It raises the prospect of a world where bond investors are more jittery about buying the debt of countries with large ongoing fiscal deficits, like a certain global superpower celebrating its 250th birthday this year.

Driving the news: The yen soared 1.2% against the U.S. dollar overnight, following a steep sell-off last week, as traders saw hints that a government intervention to prop up the currency could be imminent.

• "We will take all necessary measures to address speculative and highly abnormal movements," Japanese finance ministry official Atsushi Mimura said Sunday, per Bloomberg.
• It comes after a week of wild gyrations in both the currency and longer-term Japanese bonds, which sold off sharply last Monday and Tuesday, pushing borrowing rates sharply higher — with spillover effects to U.S. assets.

State of play: Japan has spent the last three decades trying to jolt its economy out of a deflationary trap that has been accompanied by persistently low interest rates.

• Those low rates have allowed the Japanese government to run up an enormous public debt of more than 200% of GDP.
• It has contributed to capital flows abroad. Japanese insurers and pension funds have plowed money into higher-returning assets overseas. Hedge funds have maintained carry trades, borrowing in yen and investing in higher-yielding assets elsewhere.
• The Japanese government's war on deflation increasingly looks to have been won — but nobody said the journey from the ultra-low rates regime to something more normal would be seamless.

Zoom out: The recent volatility began with Prime Minister Sanae Takaichi proposing tax cuts in the run-up to Feb. 8 elections. That, in turn, fueled worries about widening deficits and their impact on Japan's fiscal sustainability in light of the massive existing debt overhang.

• It is a turnabout from decades when the government could seemingly enjoy a policy-free lunch, running loose monetary policy and wide deficits with little pain in the form of inflation or higher rates.
• Key longer-term rates spiked to multi-decade highs. They have since receded, but the 40-year Japanese government bond is now yielding 3.91%, up from 2.65% a year ago.
• That in turn triggered a large (though short-lived) sell-off of U.S. assets, reflecting the heightened risk of a pullback of Treasury buying by Japanese institutions and the yen carry trade — and broader wariness of countries with high debt.

What they're saying: "Japan has been the world's financial shock absorber for a generation, and that role has abruptly ended," Nigel Green, CEO of deVere Group, says in a note.

• "The repricing of Japanese debt is a systemic event, not a local story, and investors need to treat it as such," he adds.

The bottom line: "The bond market is signaling a credibility test for fiscal policy," Green writes.

Some of California's most prominent venture capitalists are quick to slam their state, arguing that fiscal mismanagement and high taxes will cause startups to form elsewhere.

• So far that doesn't seem to be happening.

The Trump administration plans to provide USA Rare Earth with $1.6 billion in mostly loan financing to extract and process the materials and manufacture rare earth magnets.

• The agreement will provide the U.S. government a stake somewhere between 8% and 16%, depending on how the agreement is executed, a filing states. The company announced a separate $1.5 billion in private finance.

The health care job growth that's powered the labor market since the COVID pandemic is stalling out.

Why it matters: Republican cuts to federal health programs, AI automation and rising costs are making health systems and other employers level off hiring — including for jobs requiring a professional license like nurses or physical therapists.

Investors are confronting a different world, marked by the Trump administration's aggressive push for a new global order, renewed attacks on the Federal Reserve, increasingly controversial immigration actions and much more.

Why it matters: It's not even the end of the first month of the year. Throw out your 2026 outlooks.