Weekly Insights
Weekly Webcasts
Join us every Monday for expert market commentary and analysis. Our weekly webcasts cover key market developments, economic indicators, and investment strategies.
Europe’s Latest To-Do List & Poland Shows How To Do It
European leaders’ annual meeting in Belgium yielded a plan to increase Europe’s global competitiveness: One Market, One Europe. William discusses the pressures that have steeled leaders’ determination to unite the member countries into a single market, the three pillars of the plan itself, and challenges that stand in the way. Of utmost importance is incentivizing private investment to get member countries on board.
10 Roaring Reasons To Remain Optimistic
Annual real GDP growth averaged 3.6% during the second half of the 1900s versus just 2.1% since 2000. Dr Ed projects a return to 3.6% or higher over the remainder of the “Roaring 2020s” and into the “Roaring 2030s.” Today, he discusses 10 reasons for his bullishness on the outlooks for both the US economy and S&P 500 companies’ earnings. These include robust consumer spending supported by demographics and a huge wealth effect, massive capital spending on technology, onshoring trends, a productivity growth boom, fiscal and monetary stimulus, energy spending, and the Trump administration’s rebalancing of US trade with lower imports and greater exports.
Meet Kevin Warsh
Today, Dr Ed examines the world according to Kevin Warsh, President Trump’s pick for the next Fed chair. Warsh believes that the US is undergoing a productivity-led growth boom, as our Roaring 2020s thesis maintains, which should be supported by supply-side, pro-growth policymaking. He thinks fiscal policy’s role is to spur economic activity by keeping taxes low and regulations light, while monetary policy’s role is to spur investment by keeping interest rates low. He rejects the Phillips Curve model that views inflation as a byproduct of low unemployment and too much economic growth; Warsh views inflation as a “choice,” a byproduct of unsound fiscal and monetary policy decisions. And he envisions a new approach to Fed policymaking that’s less reactive to the latest economic data.
In Praise Of Record Profits!
A curiosity of the current US economy is its remarkable strength despite an affordability crisis. Average real consumption per household and real hourly earnings of production and nonsupervisory workers are at record highs, but plenty of people fall short of the average. When entrepreneurial capitalism is flourishing, Dr Ed explains, the wealthy benefit faster. … Entrepreneurism is flourishing currently, as record-high proprietors’ income and new-business applications attest. Yet it hasn’t boosted employment to the degree expected. In the past, profitable companies had to increase both capital spending and payrolls in order to expand. Now, the former may be enough: Investments in new technology have boosted productivity so much that new hires are less necessary.
On The Latest Geopolitical Consequences Of Donald Trump
The EU finally inked a long-sought trade deal with a bloc of South American countries the very day that Trump slapped additional tariffs on EU countries opposing the US’s purchase of Greenland. William explains why the South American deal is a huge boon for Europe. … He also discusses geopolitical fallout from Trump’s move on Venezuela, including how it impedes China’s ambitions in South America, may ramp up China’s efforts to take over Taiwan, and may threaten the US-China trade talks.
2025 Was A Great Year For The Roaring 2020s
Last year was a picture-perfect rendering of our Roaring 2020s scenario in action. Economic growth soared on the shoulders of a productivity boom. Dr Ed expects more of the same through the decade’s end and possibly beyond. That should set the stage for excellent earnings growth, supporting our S&P 500 target of 10,000 by the end of the decade. Today, he explains why even recent labor market weakness can’t derail this narrative. It’s a “Gen-Shaped Economy,” with retired Baby Boomers keeping consumer spending aloft irrespective of the labor market. ...
The Gen-Shaped Economy
It’s an economic curiosity of our times: The US economy is undeniably strong, in fact remarkably resilient in the face of recent headwinds. Yet it’s in the midst of an affordability crisis that has hit Gen Zers and other lower-income folks especially hard. Even so, consumer spending is brisk, and Dr Ed expects it to remain so. What’s going on? The paradoxes can be explained largely by one distortive phenomenon: The largest generation in history is retiring and spending substantial nest eggs accumulated over decades of work
More Thoughts on 2026: Markets, Earnings, and Volatility
Dr Ed Yardeni shares additional thoughts on the outlook for 2026, including why the economy and markets remain resilient and where risks may emerge. He discusses earnings-driven market gains, consensus S&P 500 targets, the impact of Fed easing and fiscal stimulus, and why the first half of 2026 could be volatile despite a constructive full-year outlook. Ed also covers AI competition, productivity trends, bond yields, deficits, gold, and key contrarian indicators.
Stocks, Bonds & Gold In 2026
Ed Yardeni shares his outlook for stocks, bonds, and gold in 2026, examining the key drivers that could shape each asset class in the year ahead.
Game Of Thrones: The Mag-7 & The Fed
It has all the drama of “Game of Thrones”: The Magnificent-7 kingdoms, each surrounded by moats, rarely had threatened each other’s monopolies in the past. Now, with the advent of AI, they have been encroaching on each other’s previously sacrosanct fiefdoms, forcing one another to spend ever more to remain in the game. Amid the chaotic disruption, investors’ AI euphoria has given way to AI agita as confidence in the Mag-7 ebbs. Are their earnings inflated by accounting? Will returns justify their capital investments? Our take: AI will have a powerful impact on productivity in the economy. The winners may not be among the Mag-7 at all but the S&P 500’s Impressive 493 and the economy at large. … Today, Dr Ed enlists the help of Google’s Gemini AI assistant to extend the “Game of Thrones” metaphor to this disruption as well as the transition in the Fed’s Iron Throne.
2026: Another Year Of Living Audaciously!
The coming new year looks like another good one for stock investors. Dr Ed is adjusting his subjective odds of various stock market scenarios, including raising the odds of his base-case Roaring 2020s outlook to 60%. Associated assumptions for earnings and valuation levels produce an S&P 500 price target of 7700 by year-end 2026. Alternative scenarios include a bear case, triggered by a recession or recession fears (20% odds), and a stock market meltdown/meltup (trimmed to 20%). … Also discussed: Five winds at the economy’s back that support a continuation of the Roaring 2020s and six potential developments that could blow it off course.
2026 Is Coming!
Our base-case outlook calls for a continuation of the Roaring 2020s scenario next year, with ongoing productivity gains that fuel a robust economy, which propels earnings and the stock market higher. Today, Dr Ed reviews the Roaring 2020s thesis; outlines what he expects 2026 will bring in terms of economic variables, earnings, and the S&P 500; makes portfolio allocation recommendations; and weighs in on the “Impressive-493,” the rising appeal of foreign stock markets, bullish expectations for the dollar and gold, and bearish ones for bitcoin. After the Roaring 2020s? There’s reason to think the 2030s could roar as well.
All About Earnings
The economy and corporate profits have been remarkably resilient in recent years despite numerous formidable challenges. This year continued the remarkable performance, as Trump’s Tariff Turmoil failed to derail earnings or the economy. As a result, the stock market has soared. We remain optimistic on the outlooks for the economy, earnings, and the stock market, supported by a continuation of this year’s remarkable earnings strength into 2026. … However, there are some legitimate concerns regarding AI-related companies’ accounting practices that call into question the quality of S&P 500 earnings generally, given the Tech sector’s outsized earnings share.
Geniuses Of Stablecoin
Now that the GENIUS Act has established a framework for stablecoin issuance with safeguards for consumers, we expect stablecoin usage to proliferate. Because stablecoins are backed by liquid assets such as Treasury bills, their proliferation is likely to affect bond market dynamics. Because stablecoins can be used for transactions, they’re likely to shrink the markets for other cryptocurrencies that can’t be, like bitcoin. Because stablecoins are a new M1 component, they’re likely to reduce the Fed’s control over the money supply. How stablecoin’s uptake will alter monetary policy, interest rates, and the federal debt is hard to predict. Stephen Miran theorizes that stablecoin proliferation will lower the neutral interest rate, requiring the Fed to ease accordingly. We aren’t convinced.
Powell’s Swan Song
The data-dependent Fed is operating as well as possible without the usual economic data releases from government agencies during the shutdown. The shutdown is the latest in a series of unusual challenges Jerome Powell has navigated admirably as Fed chair. When his term ends in May, he’ll no doubt be replaced by a Trump loyalist, who undoubtedly will push the FOMC’s other voting members to provide easy monetary policy. If the chair is outvoted, the resulting internal dissension would be unprecedented and seriously detrimental to the Fed’s credibility. … For now, Powell’s statements during his recent presser suggest that a December rate cut is far from certain.
Inflation: 3.0% Is The New 2.0%
The Fed Put is back. Given the likelihood of two more reductions in the federal funds rate before year-end, we’re reducing the odds of our bullish base-case Roaring 2020s scenario from 55% to 50% and raising the odds of an even more bullish stock market meltup from 25% to 30%. Indeed, the stock market jumped Friday in reaction to a cooler-than-expected inflation report, since it buoys the case for Fed ease. Today, Dr Ed explains why further rate cuts are not needed now with both parts of the Fed’s dual mandate, unemployment and inflation, close to Nirvana. The Fed’s attempt to achieve the “neutral” FFR rate by easing is more likely to drive stock prices higher than to help the labor market.
Halloween Is Coming
Investors’ panic attack Thursday was another of many short-lived frights that haunt bull runs. Our economic analyses help us spot the difference between panic-generated minor pullbacks and scarier downturns like corrections and bear markets. Corrections tend to occur when investors fear a recession that doesn’t happen. Bear markets tend to be caused by recessions. Currently, the economy remains resilient, and a recession is unlikely, in our opinion. Plenty of frightening scenarios have been floating around in recent years, but our confidence in the resilience of the economy has helped us to expose them as phantoms.
Trump Trade Turmoil, Again
The latest US–China aggressions have the financial markets worried about the high stakes of a trade war between the globe’s biggest trading nation and its largest economy. William observes that a disruption to global supply chains would have adverse consequences for earnings, economic growth, and central banks’ pursuit of their mandates. But given the severity of the consequences, we expect a quick de-escalation of the tensions, with both sides willing to negotiate.
Still Roaring
Sunshine during my tour of the West Coast and in the stock market last week. But everyone’s on the lookout for signs of an AI bubble. Jeff Bezos has a positive take on bubbles that makes sense to us: They accelerate funding and hasten AI’s tremendous benefits. Revisiting the BRAIN Revolution and our long-standing confidence in technology and its positive impact on the economy.
Meet Bonnie
Our Roaring 2020s outlook has been on target since the beginning of the decade. Over the past two quarters, GDP growth and consumer spending have been robust, and the recession widely anticipated for three years and as recently as April never showed. The Fed’s September interest-rate cut—made proactively in response to weak payroll stats—was probably a mistake that could stoke price inflation and financial speculation. While unemployment is low, AI is disrupting some areas of the labor market. The Fed’s rate cut won’t help former tech workers now driving for Uber. … The good news: Consumer spending should remain strong as Baby Boomers work down substantial nest eggs and support the spending of their adult progeny.
Is The Fed’s Policy Restrictive?
The Fed’s 25-basis-point cut in the federal funds rate last week doesn’t change our S&P 500 price targets or our subjective probabilities of a meltup (25% odds) or correction (20%) by year-end. Today, Dr Ed explores the reactions to the rate cut in the markets for stocks, bonds, the dollar, and gold as well as the significant takeaways from the FOMC’s September 17 meeting. Notably, the post-meeting Dot Plot and press conference revealed less dovishness than many investors had expected.
Dear Scott
A recent article by Treasury Secretary Scott Bessent takes aim at the Fed for its use of unconventional monetary tools and its mission creep. Today, Dr Ed addresses the Treasury secretary in an open letter, detailing where they agree and diverge on the Fed’s role and what monetary and fiscal policies are needed to sustain the Roaring 2020s scenario that both support. While an original aim of the Fed was to promote financial system stability, Bessent’s push for lower interest rates risks a stock market meltup and upward pressure on inflation and bond yields. … Also potentially destabilizing: The administration’s highly unconventional Genius Act, which would use stablecoins backed by US Treasury bills to increase demand for Treasuries and fund the federal debt.
The Good, The (Not So) Bad & The (Relatively) Ugly
Our Roaring 2020s economic scenario and expectations for inflation and the labor market suggest that the Fed probably shouldn’t cut interest rates this year, although one cut might be warranted if upcoming inflation reports are more subdued than we expect. Yet a rate cut next week, after the FOMC meets Wednesday, is practically a foregone conclusion. Stimulating an economy that doesn’t need stimulation won’t create more workers to address the undersupply that’s constraining the demand for labor, Dr Ed explains. Plus, cutting rates when it’s not necessary could cause stock prices to melt up and destabilize the broader financial system. … Plus, a look at the debt crises attracting Bond Vigilantes’ attention in the UK, France, and Japan.
What Could Possibly Go Wrong (with special guest Jim Lucier of Capital Alpha)
September has a long history of being a tough month for the stock market. This has been particularly true over the past decade, based on the average year-to-date percentage change in the S&P 500 during Septembers (chart). But when September was weak in the past, it often provided buying opportunities for year-end rallies.