The Federal Reserve will start purchasing $40 billion in Treasury bills monthly starting Friday to ease short-term funding costs and rebuild reserves, responding to rising short-term rates and funding market pressures. This move comes earlier and is larger than expected, with the Fed noting that reserve balances have declined to ample levels. The New York Fed expects elevated reserve management purchases for a few months before reducing the pace.

Eventus CEO Travis Schwab said the firm is rolling out a "deterministic" AI system called Frank to help banks meet regulatory demands for explainability, arguing that traditional probabilistic models cannot reliably support compliance. Frank generates code-based, repeatable data queries to avoid inconsistent outputs, while Eventus also expands tools such as its Pulse dashboard to help firms cope with rising surveillance complexity amid 24/7 crypto and prediction markets.

"AI adoption is only going to increase in 2026, propelling AI governance and assurance to the top priorities for risk and audit functions. That will call for a new category of audit professional: the AI auditor." — Graeme Fleming, Workiva.

CyrusOne reportedly detected cooling-system issues at CME Group's primary data center 12 hours before a failure halted global derivatives trading, though shifting severity ratings delayed a failover decision. The outage, caused by human error during cold-weather preparations, forced a full trading halt across CME's markets and has prompted new 24/7 engineering protocols at the facility.

Large hedge funds are increasingly spreading execution across multiple algorithmic providers, with nearly 70% now using two or more, according to The TRADE's 2025 Hedge Funds Survey. The shift reflects a move toward risk diversification and anonymity rather than pure speed, as buy-side firms adopt more algos across equities, fixed income, and FX to manage market complexity.

Rising government bond yields and steep forward curves are driving a surge in fixed income structured products, with issuance now topping an estimated $10 billion and expanding beyond early adopters in the US and France. Dealers say products referencing constant maturity government bond yields offer clearer investor messaging and materially higher coupons than swap-based equivalents, enabling Phoenix-style autocallables and range accruals to consistently print 7% payouts.

A surge in lending across corporate-bond, syndicated-loan, and private-credit markets is enabling a wave of large, highly leveraged deals, including Paramount's hostile bid for Warner Bros. Discovery and the earlier buyout of Electronic Arts. The simultaneous strength of all three financing channels is giving acquirers more options than ever, delivering big payouts to shareholders while increasing risks for bond investors as credit markets may be showing signs of overheating.