October 28, 2026: Although yield spreads have increased, it is not yet enough to cause the underlying economy to wobble. Instead, earnings associated with AI continue to be robust and the labor market is holding up well. Of course, once borrowing costs make it too tough on smaller businesses to invest, grow, and compete, then the labor market will be the first to let us know.
This leaves the Fed plenty of room to attend to the growing inflation problem. As such, expect another rate hike in December. Iran seems to be the one in control of the war in the Middle-East, not Donald Trump. Continued high gas and diesel prices are therefore becoming the norm. Political maneuvers to assuage truckers and farmers so that they might still vote Republican are nothing more than a short-run band aid.
The other inflationary problem comes from Trump’s tax increases on U.S. businesses and consumers in the form of tariffs. Causing any real assets to redeploy towards more inefficient and higher priced U.S. production to replace more efficiently produced and lower priced imports will also be inflationary. Since historical data and economic theory indicate that much greater losses will accrue to business and consumers relative to any small gains for U.S. workers, net national wealth must also decrease — making the U.S. much less great.
But, then again, when has a politician’s policies ever achieved their stated goals? As an economist with an area of emphasis in Policy Analysis and Program Evaluation, I can say quite authoritatively: Almost never!
Some vetted stocks to consider at this time include: HHH, CRM, REPX, HCSG, and RGA. Dividend growth stocks to consider include: BP, TXO, UGP, ENIC, EPD, GBDC, MFIC, NMFIC, NOAH, OBDC, PK, and SLRC. The best ETFs to buy now include: SPYM, QQQM, IAUM, SCHD, and VXUS. As always, good investing!
