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To this day, I am surprised by the storylines that are developing in the markets.
Color me surprised by how quickly the markets recovered after the slaughter “The Day of Liberation”. Tariffs? Who cares? More stocks than NVIDIA (NVDA), please!
Also add me to the surprised column about how fast markets have bounced from the big recession low March 2009. I clearly remember that I stared at the economic data of God for most of 2009 … and a rally market.
I go back today with the latest head telling about the head (albeit a smile-trigger) story developing among investors: 2026 will be Monster A year to reduce interest rates, so buy shares today over fist! You didn’t read that wrong, friends.
Five months remain in 2025 – months that will include profit periods, rates for tariffs, deadline for a tax account and no doubt many negative surprises – after all, investors are already included within 2026.
I don’t do you, no, I confess Morgan Stanley to bring out this developing story on the surface last week, as I have heard from it for weeks.
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Morgan Stanley said his economic team sees seven tariffs in 2026, “a dynamic that is likely to be the second half of the wind for tariffs and evaluation.”
Mike Wilson, closely, the following chief investment strategist, noted that “there are already signs that the stock market is starting to value it now.”
Wilson continued: “Our work shows that the efficiency of equity is strong during the Fed cutting cycles, even if this tail begins to decrease in advance.”
Keep in mind that everything we have heard from Fed President Jerome Powell in recent weeks suggests that the shortening of the tariff later this month or September is far from guaranteed. June’s strong jobs further blur the picture.
Still, back up the truck at seven tariffs for 2026.
Read more: How the Fed Road Solution affects your bank accounts, loans, credit cards and investment
I have to point my hat to veteran Charles Schwab Stratest Liz Ann Saunders to push back on this view.
“So I have a little opposite taking of this [rate cut view]S I think part of the reason, if you wanted to specify the main reasons why the market did as well as it is, in fact, because the Fed does not reduce interest. And this is because the background conditions, since they are related to their double term, do not suggest that the Fed should move on to an easier policy, “Saunders told me about Yahoo Finance’s opening offer.