Key Wealth National Call: Managing Wealth in an Age of Disruption and Change
Brian Pietrangelo [00:00:00]
with our key national call, in terms of our Key Wealth National Call, with the topic, Managing Wealth in the Age of Disruption, and providing our 2026 forecast from the Chief Investment Office here at Key Wealth.
We always start with the obligatory disclosures, just to make sure everybody knows on the call that we are not giving any specific investment recommendations, nor tax advice, nor legal advice. It's pretty standard for calls like these, so we always start with this just as a simple reminder to everybody on the call.
With that, I am Brian Petrangelo, Managing Director of Investment Strategy within Key Wealth, and I'm very thrilled to be joined by my colleagues today to have the podcast and provide a tremendous amount of wisdom in terms of our thinking and where we're headed for 2026.
We'll start with George Matteo, our Chief Investment Officer. We'll also be joined by Steve Haidt, our Head of Equities, and also by Rajiv Sharma, our Head of Fixed Income.
In addition, you can submit questions, and on the screen, you will see the method in which you are able to ask questions within the Zoom webcast. Specifically, looking at the bottom of your screen, you'll see a Q&A button.
Simply use that Q&A button, and a window will pop up.
and then you can ask a question, enter it into the Q&A box, and then hit send, and we will try to address those questions during the webcast. Now, I'd also like to say I'm supremely thrilled by the fact that we have over 1,500 individuals who have registered for the call.
And 130 of you submitted questions in advance, and the great news is that a lot of the topics that you'd like us to cover, we already have within our prepared remarks and the slides that we will cover.
In addition.
After the call, it will be recorded, and we will be able to send out, at a future date, the recording and the link to the recording, as well as the PDF version of the slides.
So, be, you know, be interested in that if you want to go through the details that we're going to cover on the call, and you want to see it in writing at your own pace. So with that, we will turn to our first commentary, which is to go back in time
And every year we do this around November or December, and we do our forecast for the upcoming year.
So almost exactly at this time last year, we made our calls for the 2025 year in November of 2024. And the great news is that we were very well aligned with our thinking for some of those items that came pretty much true.
Now, this business is very difficult, and making forecasts is not an exact science, and so we have a significant amount of humility.
At the same token, it's nice when we look forward a year ago and made those calls in 3 specific macroeconomic environments, as well as the stock and bond markets, we were pretty much spot on.
So, George, you actually wrote in our written outlook on page 8 what the implications of the new Trump administration might be in a number of different areas related to tariffs, immigration, deregulation, and taxes, and the setup for what we thought would occur
pretty much occurred in 2025, so kudos to you, George.
On the other side of the equation, when we looked at the stock market, Steve Haight, you gave your recommendation of where we would be in 2025, commenting on page 16 that it would be very difficult for the market to gain any type of momentum in the first half of the year, but once we got past the first half of the year, the second half.
Would likely see some pretty nice upside potential.
Boy, did we certainly see that surrounding Liberation Day and in April, but really the pickup since then and through the second half of the year. You also commented that it would be a pretty good opportunity to have the market there.
So, good call there, Steve. Again, kudos to you. And then finally, on the fixed income environment with Federal Reserve policy and interest rates, Rajiv Sharma wrote on page 20 that our base case for 2025 would be 3 rate cuts. Now, next week is December 10th. We're going to talk about that policy of that last meeting. If the Fed does ease during that meeting, we'll get exactly 3 cuts.
So kudos to all three of you, George, Steve, and Rajiv, for your outlook. Again, we're not always perfect, it's a difficult business, but we wanted to share with you from our standpoint, looking back one year from today.
So now, let's turn to the main topic. Is George going to take away some of the topics we are going to discuss within our prepared remarks? George, welcome to the call.
George Mateyo [04:40]
And thank you very much, and thank you all for joining today. Really appreciate your, making the time to be with us and, and listen to what we have to say. So, as Brian mentioned, we'll try and set the context for a few things that might be on your minds.
We appreciate your questions ahead of time, and it seems like we're fairly well aligned with those. But we want to really kind of cast a pretty wide net here and talk about some of these big disruptions that are happening, actually, all at the same time.
And importantly, they're all happening in a way that they're interconnected with each other, and so they have some significant implications for our markets, for the economy, and really society writ large.
And so we've just listed them here, and some of these have been going on for a while, so this isn't really new development necessarily, but they are really kind of crescented at a point in time that really deserves attention
When we think about creating portfolios for clients, and how they think about managing wealth in this age of disruption.
So, the three disruptions that we talk about in the course of the next 35, 40 minutes or so have to do with one thing called nationalism, which essentially is a kind of a reference to countries more and more kind of behaving in their own self-interest. And that's not really a bad or a good thing, it's just a reality that we're in a situation right now
Where globalization, which really was a tailwind for many years, has really retreated. And in its place, we've seen this thing called nationalism really rise up and really kind of take on some interesting implications for markets and also for economies.
I think at the same time, this notion of state capitalism, again, this has been going on for quite some time. It's become more of a new thing with inside our domestic policy agenda.
But that too, I think, is also something that has some really important implications for investments and markets and society as well.
Now, of course, we can't have… we cannot have a conversation if we don't talk about artificial intelligence, and that's really been at the forefront for quite some time. It's really taken on a life of its own, and so to some extent, we could probably spend the hour talking all about that. We won't.
But again, there too, it's very much related, in the sense that many countries right now are establishing their own policies, their own domestic priorities.
around their own AI agenda. So we'll talk a bit about AI, we'll talk about that from the market perspective. We have a lot of great questions that we've already gotten
about artificial intelligence, so we'll spend some time talking about that. And then maybe a little bit towards the end, if we have time, we'll talk about the third disruptor and force, which has to do with private…
And this was catalyzed earlier this year, when President Trump essentially signed the executive order, I think it was on August 7th or so, that was really focused on democratizing alternative assets within 401K retirement plans. And so we're really just at the early stages of that, but I think that's also important in the sense that many of those private investments
are focused on newer technologies, such as artificial intelligence, and they're also at the forefront of building out some of the infrastructure around AI. So again, all these things are kind of coalescing together at the same time, and they all have really important implications for people's portfolios.
Before I delve into that, though, I did want to take a step back, and as Brian mentioned, I think we thoughtfully kind of thought about many things that could happen this year through the lens of the policy perspective. We've noted many times that policies don't make markets sometimes, and really it's the markets that make policies, but
This has been an interesting 12 months in the sense that many policies have really been dominating the conversation, and certainly have been really influencing market activity quite profoundly.
So, this chart might look familiar to many of you. This is a very similar matrix that we laid out roughly 12 months to this day. And we talked about this in the sense that there might be four key areas in which the incoming administration might focus their efforts.
We also outlined this in the sense that we ranked these, essentially, and sorted these based on that far right column on your screen labeled Congressional Involvement.
Meaning that in our view, when we thought about what this year would look like, we thought that the likelihood of some of these things coming to fruition would be essentially dominated by the way… the ease with which they could actually be administered. So, the fact that Congress was less involved, for example, in tariffs kind of had made us think that maybe in the first part of this year, we'd see tariffs dominate the conversation.
Similar to immigration, we also thought deregulation would come sometime episodically over the course of the year, and taxes, frankly, surprised us in the sense that it actually was more accelerated, and actually, we got some tax relief and some significant tax developments earlier than expected around the 4th of July holiday.
So, that was an important framework to think about the sequencing, the origin of these things, and we talked about the scope of these things really mattered much for markets, and again, we saw that really dominate the overall market narrative for the past 12 months.
Now, the other thing we also kind of laid out, in the sense that when we thought about these things together, what the important question was, what impact would they have on the economy? What impact could they have on markets? What impact could they have on people's portfolios?
And we outlined the fact that really, you know, net-net, we would probably see maybe slightly higher growth.
we might see moderately higher inflation, and we'd probably see a larger budget deficit. So, to some extent, these things were kind of pro-growth, maybe, again, somewhat similar in the sense that they maybe conjure up a bit more inflation, and that also might widen the budget deficit, but again, we also noted that there are some kind of puts and takes with all these that we'll discuss in the next few minutes or so.
So this was our framework as we came into this year. Now let's turn into through some of the impacts that we've seen thus far, and how those things have played out in a bit more granularity, and then kind of pivot, if you will, to discussion about some of these new things we've talked about in the beginning of the call around nationalism, AI policy, and also the democratization of private markets.
So, I'll begin by just talking about tariffs, right? I mean, that was something that really was really at the fore just a few months ago, and maybe the beginning of this year, and certainly got a lot of activity. We all kind of anticipated that maybe we'd see higher tariffs. We didn't know to what extent, but certainly this was a shock to the market, in the sense that in April of this past year.
Liberation Day, as it was known, was announced, and tariffs across the board were raised significantly. So you can see on the very far right part of your screen, the overall effective rate, this is actually essentially an average of all the tariffs going back hundreds of years, basically, shot up to around 30%. And of course, we had a significant market dislocation then.
stocks sold off, bonds sold off too, and actually the currency, the U.S. dollar, actually slipped as well.
And I think we kind of saw that reaction very viscerally, in the sense that we were actually having one of these calls, Brian, when that news kind of first broke, I think, that maybe there's some relief coming there. So we had this big shock, essentially, in early April, where tariffs essentially were abruptly raised to about 30%.
And then subsequently, they were lowered to where they are right now, roughly about 17%, which is the orange bar on your screen. So again, tariffs have been raised significantly. The tariff rate has gone up from roughly 2.5% or so percent to about 16.5% to 17%.
But they are below their peak, where they were contemplated to be roughly in April of this past year. And notably, I think, you know, around that time, the odds of recessions picked up, we saw credit spreads widen, we saw some paddocks in the market, and that was really reflective of the fact that many people thought that those high tariff rates of around 30% would be recessionary. Now, thankfully.
That didn't happen. Those tariffs were walked back and revised to some extent, and now I think the market's kind of come to grips with this new kind of leveling off, roughly, kind of in the mid-teens or so, which, again, is really where the orange bar on your screen is.
So, what does this mean? So, we've talked a lot about the fact that many people thought, many economists thought.
that tariffs would essentially be inflationary. And so, where are we on that?
On this page here on slide 10, it shows you that inflation has picked up at the goods level. So then this would be kind of things like house out items, things that we kind of buy, and if you drop them on your foot, they hurt. So these are… these are durable goods, if you will. They have a shelf life of a couple years, and that blue line, as you can see there, has picked up. Now, some of that is kind of noise, frankly, because that blue line shot up so high.
out of the COVID pandemic, and you can kind of see what happened roughly around 2020, where goods inflation really, really took off. And then since then, it's kind of come down and moderated and actually went negative for a while, and now it's kind of rebounded. So again, goods inflation is picking up a little bit.
Services inflation, which essentially is everything else that includes housing, that's a really big component of that. Services inflation has actually started to moderate.
And again, this might be driven by policy decisions, such as immigration, which we'll talk about in a little bit.
But overall, the net-net, if you kind of sum these two together, you have to kind of weight them a little bit, but net-net, overall, we see inflation being somewhat sticky. It's kind of, I think, at the aggregate level right now, roughly 3%.
But it's not surging, so again, inflation is not going from 3% to 9% as it did just a few years ago, but again, it is higher than the Fed's target of 2%, and that's going to present some challenges for the Fed as we think about next year, and we'll talk about that with Rajiv in a little bit.
So, the other thing I want to talk on just a minute about the high level, then I'll kind of come back to the policy discussion, has to do with employment. So, we can't not talk about
inflation without talking about employment, because essentially that is the other part of the Fed's dual mandate. The Fed has two primary mandates. One is to make sure inflation is relatively stable, and they also want to see a stable jobs market, too.
So what we see right now, essentially, is the fact that the employment situation is certainly cooling, and we, again, get more evidence than that just this morning, in the sense that the overall labor market showed a small decline based on some survey data. It's not the official data that we typically rely on.
But nonetheless, if you look at the data here on slide 11, it shows you that jobs are still being added, but at a slower pace, so that green line is going down. At the same time, unemployment, which is the red line, the red bars, the red, yeah, the red line.
is going up. So again, we've seen inflation moderate a little bit, but we've also seen the labor market start to cool off a little bit too, which, again, has some implications for policy from the Federal Reserve, and we'll talk about that again in a little bit.
Now, the other thing I want to talk about has to do with inflation again, is the notion that one word that has kind of caught in the attention of many people lately is this term, affordability.
And that's a term that people kind of gravitate towards around the COVID recession, and the subsequent jump in inflation.
But effectively, that's still been with us for quite some time, and indeed, affordability is still a challenge for many, many people, probably too many.
The chart on the right on slide 12 shows you, essentially, the price change of various items
since 2020, so this is just prior to the pandemic. And you can see all those different red bars, essentially, represent certain items, and then in green, we essentially showed you the overall increase in wages for that same period of time.
there's a way to kind of contrast where prices are with respect to people's incomes, and it's a proxy, it's a rough approximation, but I think it's a very good estimation, and again, a very good signal that many items that people pay for every day, like food, electricity, gas, homes, and so forth.
Those things are still higher than wages. So again, many people probably feel somewhat behind, even despite the fact that the economy is doing quite well.
So, affordability is going to be with us for a while. This is a challenge that's probably going to be dominating the conversation next year as we walk into the midterms. So again, this is not going away, this is not new news, but this is something that is going to be lingering for a while longer as we talk about in the subsequent pages.
Now, the other thread with respect to the president's new administration and some of their policies, one of their planks that they campaigned on, essentially, was tax reform.
And as I said at the beginning, tax reform, frankly, was something that surprised us, in the sense that actually it didn't surprise us that this was going to be part of the conversation, but the way in which this actually moved through the process, the legislative process, essentially, was a bit more accelerated. And the numbers were probably a bit more favorable in terms of their economic impact as well.
So, it can't be dismissed, the fact that the rise of the deficit is something we have to contend with, and that's something we'll talk about in a later part of the presentation.
But we also acknowledge that there is a real boost to the overall stimulus with respect to the fiscal side coming in the form of tax cuts for many people, some tax cuts, for example, with tips.
Those would be actually part of the overall plan that goes into effect next year. And many businesses are also using these tax cuts as a way to accelerate capital spending. So again, we're going to see a boost from capital spending next year, we think, as well.
So, we have this kind of economy where inflation is still somewhat sticky, but we're also getting more stimulus from the government, and that actually is a pretty good backdrop for risk assets and the economy going forward as well.
Now, one challenge that I think is kind of interesting, that I think was probably a little bit misunderstood, and I think it's still a little bit fuzzy in terms of its true impact and what it's known to be.
But frankly, as we think about all these different policies that the administration has been talking about now for the last several months, the one that really kind of surprises, I think, many people is immigration. Now, people are expecting maybe
tighter, restrictive, more immigration policies, but their impact, I think, is going to be larger, perhaps larger than the trade policy impact, and that's pretty significant, in the sense that many people coming into this year were thinking that tariffs were going to be a dominant part of the conversation.
But I think immigration is going to be just as important, if not more so.
Now, why do I say that?
I say that because, essentially, if you think about the overall growth of the economy, and I think, Steve, you've talked about this more specifically, too, to get economic growth, you need labor growth, right? You need people in the economy, you need people, people working. People earn money, they spend it. And so you need that growth of the overall employment sector.
And when you have immigration essentially being the dominant driver of employment growth for the past several years.
We often… we're going to lose that, essentially, if there's a… or maybe we can replace that some other way, but because immigration rate now is slowing dramatically, and in fact, we're on pace this year to see the biggest decline in immigration other than a recession. So it's not surprising to see employment contract during periods of recession. That's kind of what a recession is.
But this is a decline in which the foreign-born portion of the labor market is declining at a rate that we haven't seen outside of a recession. So this is somewhat unprecedented, and again, this has applications, maybe the growth is a bit slower next year for this very reason.
Now, I also want to come back to talk about tariffs for a second. Now, one thing that's also, I think, kind of interesting with respect to tariffs is that
Without going into a lot of the details, and we're not going to talk about individual applications of tariffs.
But one thing the administration leaned on is this thing called IEPA. Essentially, that was a statute that the administration put forth as a way to say, we need tariffs. Now, many of you might have read the fact and kind of seen this in the press over the last few months or so, that that is being challenged by the courts. The Supreme Court actually has this on their desk right now.
They're expected to make a ruling sometime between any day now, frankly, and maybe June of next year, so this is a… probably a near-term event.
there is some… there's some chance, I think, that maybe tariffs under the IVA statutes essentially get rescinded. They say, maybe this is unconstitutional, that could be a decision that could happen.
And we've seen this unprecedented amount of revenue from tariffs that actually, again, is providing some real benefits to the economy.
So if that actually gets rescinded and actually is ruled unconstitutional, we might have to see those monies repaid somehow. I think that could be very burdensome administratively, but that's one thing we have to think about in terms of near-term volatility within the scope of the market. But I would contend, I think.
And I think my colleagues, my panelists as well, we would contend that probably tariffs are going to probably stay higher, not lower, and they'll probably find other statutes in which to actually impose tariffs going forward as well.
So, I do want to spend time talking about what that means. So, I think we've also talked about the fact that when we have seen the tariff response, both domestically, we've also seen a pretty strong response internationally. And I think it's quite interesting to think that America is essentially kind of redefining its role in the world, and we've seen that take place in many different ways.
But at the same time, the world is not standing still. The world is actually kind of redefining its role with America, too.
And indeed, essentially, when some of these tariffs were put forth this past spring, we saw many governments in other parts of the world kind of stand up, and some of them didn't really retaliate, so we didn't see an outright trade war, which I think was welcome news from the markets.
But we did see a rise of nationalism. Again, we saw other countries respond by instituting their own domestic agenda as a way to kind of fortify their own sovereignty, basically.
And that's one thing that kind of is kind of represented here on this page on slide 16, which shows you two other leaders of the world, shows you some quotes from them that kind of put that into context, and again, we find ourselves now in a situation where nationalistic behavior is certainly kind of grabbing attention.
So, what do we mean by that? What is nationalism? Again, it's this notion that many countries are essentially acting in their own self-interest. Not a bad or good statement, it's just a matter of fact.
And again, it's kind of a departure away from the globalization movement that was in place for many years leading up to this.
More specifically, and Steve, I would love to get your thoughts on this, so I'm going to turn over to you in just one second here, but this is just a representation here in slide 17 of the different policies that many governments are pursuing within that nationalistic theme.
Steve, anything you want to point out, anything that kind of grabs your attention as you think about this?
Stephen Hoedt [21:06]
Well, I just think, George, when you look at the world, and once again, thanks for having us on this call, you know, when you look at the world, the world is obviously a very different place than it was
basically for the last 30 years, post the fall of the Berlin Wall, right? So we had a unipolar world for 3 decades.
And now, we very clearly are moving into a multipolar world, with at least the US and China being those two, and who knows, maybe even more. And…
that has huge implications. One, defense spending, as you show here, you know, a multipolar world is a more dangerous world. So, clearly a… potentially a more dangerous world, we should say. And, you know, that's a clear response.
But to us, you know, when we think about whether it's the investments in infrastructure, other things.
you know, you see the potential interdependencies between the two multipolar powers existing in the U.S. and China, and
You wonder about…
Are we going to continue to maintain those interdependencies, or are we going to maybe try to bolster our own supply chains for pharmaceutical precursors, or things like this, rare earth metals, other things?
And those all have huge investment implications when you think about that over the next 3, 5, 10 years. And it's something I think that investors are starting to come to grips with. You mentioned it in the
2026 outlook in a couple different places, and I think it's something that we're certainly going to have to be addressing from an investment perspective, because the world is definitely different today than it was just a couple years ago.
George Mateyo [23:00]
Yeah, that's very well said, and a great summary, and I'm glad you could have put the bookends around the Cold War ending, and the wall falling, and all those other things as well. So I think this will be a theme that we'll talk more about with some specificity over the next several months. One thing that I did want to draw to people's attention is the fact that what this means, essentially, for the economy perspective.
Has to do with the fact that deficits, budget deficits, are going to be larger for longer.
It probably doesn't really kind of show the magnitude of this on this page, but I like this page nonetheless in the sense it goes back a long period of time. This is almost 100 years worth of data, and it expresses the overall budget deficit as a percent of GDP.
So, when it's negative, and it's been negative for most of the time over that last 100 years.
when it's negative, essentially, you start to see budget deficits, and not surpluses. In fact, the last surplus we had was right around 2000, 2000, actually, kind of on the far right part of your screen there. And now, essentially, we're in a debt situation where we're running at about a 6% negative deficit to GDP. Now, that 6%, again, 6% doesn't sound like much.
But translate that to dollars, and that's just under $2 trillion.
of debt right now, and many other countries are doing this. This is not just a situation that the U.S. is pursuing by itself, but in fact, many other countries are also running large deficits to fund those nationalistic priorities that we talked about on the prior page.
Now, one thing you also mentioned, Steve, has to do with this notion of state capitalism, and I mean, this is going to be a great conversation, because I know you've got a view on this, in the sense we've also seen
many countries in the past used their own government as a way to kind of prop up and maybe kind of fund global initiatives, and our country, the U.S, has been somewhat different in the sense we've really relied on free enterprise to do that. But more recently, I think, Steve, you were really kind of forward to talking about this.
is the fact that many countries now… I'm sorry, many companies now, not many, but maybe a few companies are being supported, to some extent, subsidized, by the U.S. government. So what do you make of this state capitalist movement as well?
Stephen Hoedt [24:51]
Well, I think that the two words in the… the first two words in the chart in the upper right-hand corner are words that people are going to have to get familiar with, and that's industrial policy.
Right? We've never had a formal industrial policy in the United States, ever. It's not been something we've done.
But yet, with the idea that there are strategic priorities that, for whatever reason, you know, the capitalist system in the U.S. and the West
has chosen to outsource to other parts of the world, and now, as we adapt to this multipolar world landscape, we see dependencies that we're not comfortable with. The idea that all of our semiconductors are made in, pretty much on an island just off the coast of China, called Taiwan.
That's a vulnerability, right? Same thing when you think about rare earth metals all coming from China.
So you see Intel, MP Materials, other companies being targeted by the U.S. government for strategic investment, because they are prioritizing our national interests over
over just potential market dynamics to rely on solving those interests. So, it's a very different environment for these kind of things, and I think investors are wise to look around and think about what other areas
Are… do we see, potential strategic
Deficits that we could have government investment in in order to try to course correct for what the market has done over the last 30 years.
George Mateyo [26:30]
So let me move on a little bit, just to keep the conversation. I see a few questions coming, coming in. We'll try and get to those in a little bit. So thank you for those, first of all.
But, Rajiv, let me get your thoughts on this notion, too. One other thread with respect to
Nationalism and so forth has to do with maybe central banks are less independent, and that's been the hallmark of our country for the last 115 years or so.
What do you think this means for the Fed? We've obviously got a couple changes potentially happening next year, and what do you think this means for, more importantly, Fed policy in the form of interest rates?
Rajeev Sharma [27:00]
Well, it's a really good question there, George, because the outlook for Fed independence is a big concern for the markets, especially going into 2026. We've seen political pressures, they're mounting.
There will be some leadership transitions. There's gonna be new appointments to the Fed, which will likely align with the White House. There will be debates over the Fed's dual mandate as well, as you mentioned, inflation and maximum employment.
So this could all weaken the Fed's autonomy, but institutional guardrails still remain pretty strong. So, as we all know, the Fed Chair Powell is going to be exiting in May of next year. There will be a new Fed Chair. Right now, all odds are pointing towards Kevin Hassett.
Which could be appointed by… he could be appointed by Donald Trump, next year, and, he's somewhat more of a dovish,
leader, if you will. His opinions are more that we should have aggressive rate cuts, so I think you're going to have a lot of questions about if the Fed does go forward and have aggressive rate cuts, then you have to think about the Fed's credibility. Does that become an issue as well? And as we always talked about.
Each year, you're going to have a rotation within the Fed, so it's going to be very important to see what the makeup of the Fed is. Currently, the Fed is probably leaning towards more of a wait-and-see approach with Fed members, with that narrative. Next year, we could see a Fed makeup with a bunch of Fed members talking about maybe more rate cuts.
So the net effect would be a dovish majority, especially if HACCP prioritizes easing
To counter slowing growth and, mortgage stress.
George Mateyo [28:31]
So, in terms of easing, again, that's another way of talking about rate cuts, here in this slide, Reggie, it shows, essentially, the overall expected rate cuts for next year. What do you make of this? What's your view on interest rates, and will we get a couple rate cuts, irrespective of who's chair of the Fed?
Rajeev Sharma [28:46]
Well, I do think that the market's anticipating 3 rate cuts for next year. The September projections by the Fed, they pretty much pointed towards a Fed funds rate to be around 3.4% by the end of 2026.
We will get another crack at the Fed's projections next week when the Fed has their FOMC meeting. We'll get another look at where the Fed is thinking right now as far as rate cuts go.
The market does anticipate a faster and more aggressive rate-cutting cycle for next year. I think if you listen to what the Fed members have been saying, they're probably not as aggressive as the market. Same thing happened in 2025 when we started the year off.
The market really was ahead of the Fed, trying to anticipate multiple rate cuts for this year, and we didn't subscribe to that camp, and we got pretty much what we had, questioned… what we had said in 2025, the beginning of the year. I do think that we are going to get those projections next week, and I do think it's going to be very important to see that.
But again, it goes back to the Fed's dual mandate. The question's gonna be there. Policymakers right now are split between prioritizing price stability and maximum employment. Inflation has cooled, as you mentioned, George, from its,
from its 2023 peak, but we're still not at the Fed's 2% target goal. So, data is very, very important. We have not gotten great data in the last couple of weeks, a couple of months. I think the data's going to be extremely important next year to really shape this chart for you and see exactly what the market starts to anticipate as far as Fed rate cuts go.
George Mateyo [30:13]
Wonderful, wonderful. Thanks, Rajiv. So let's, let's kind of close this section and just bring it home now for our clients to think about what nationalism means.
We tried to enumerate some of these things throughout the last 20-25 minutes or so, but again, one of which has to do, again, the notion that
Many, many countries are behaving in a way that they're taking their own self-interest account into account first. Again, it's not a negative statement, it's not a positive statement, it's just a fact of reality right now.
And because of that, deficits are going to be structured higher. I mean, countries are… they have to pay for this somehow, and deficits, therefore, are going to be run higher. That also means inflation, obviously, will be higher. Again, we're not prescribed… we're not subscribing to the fact that inflation is going to jump back to 7, 8, 9%.
But it's probably going to be sticky, to Rajiv's point just a minute ago, that inflation is probably not going to get down below 2% unless we have a real slowdown in the economy.
It could happen, but I think the odds are probably against that. And the same thing, interest rates are likely to also stay somewhat elevated. As I say here, no more. I mean, essentially, zero interest rate policy was the policy in place for much of the decade following the great financial crisis in 2009.
that period of time essentially has passed. I don't think that's going to repeat itself. Again, we would have to probably have a really severe recession for that to reemerge.
But because of these nationalistic tendencies, we think that probably rates are likely to be, I guess, higher all else equal. Again, we're not describing to the notion that interest rates would be double digits, but I think they're probably likely to be a bit higher than they would all else equal B.
Secondly, financial assets. U.S. financial assets are probably going to be subject to some headwinds. Many, many… we've seen many people actually kind of begin to slowly pivot away from the U.S. dollar. We don't see a dollar crash, but nonetheless, probably some headwinds for the dollar persist, as we saw much of this year.
Rajiv just talked about the third, element here. Again, central bank independence is starting to wane a little bit.
And then fourthly, as Steve talks about, this is a more unstable and less predictable world going forward.
So, now let's pivot and talk about artificial intelligence. Again, these are very inextricably linked. We talked about, and Steve did a great job talking about state capitalism, industrial policy, you know, those things have really, really strong connectivity to the AI theme itself, in the sense that many countries who are at the forefront of AI now are looking to actually partner with companies
and actually extend this into the policy realm to really be kind of leading the AI arms race. And again, the U.S. and China's economy are at the forefront of this.
But nonetheless, other countries are thinking about this very strategically as well. So very clearly here on slide 23, we show, essentially, that we're actually right at the birthday of ChatGPT, which is probably the most widely recognized artificial intelligence application.
It was created 3 years ago, and you can see the AI cohort of stocks, essentially, which is, you know, 7 or 8, maybe 10 companies or so, but nonetheless, those stocks in the aggregate have surged over 250%. In that same period of time, the overall S&P 500, the market, is up about 68%, and those… some of those companies are cohorts
in the S&P 500, but nonetheless, the overall market has really been driven by this theme for the last several years by a significant margin. As you say here, some of these stocks are pretty much a class unto themselves.
So, adoption, as I say, you know, has been really, really strong. Right out of the gates, within the first several months or so, we saw ChatGPT, following its launch, reach 100 million users, and that's really, kind of put that in context, you've seen other applications, whether it be Facebook or YouTube.
Netflix, you know, things like that have taken years to reach that threshold, and yet ChatGP garnered 100 million users in just a little under 3 months.
So, the response has been pretty notable in the sense that many companies now are investing significantly
to actually be at the forefront of this development around artificial intelligence. And this is a busy slide on slide 25. I won't walk you through all the numbers, but suffice to say, as we came into this year, we expected many companies
to increase their spending around artificial intelligence, and indeed they did, but beyond that.
They raised their budgets for capital spending by a significant margin, in some cases, 50, 60, 80%. So again, capital spending has just been massive.
And that's been kind of notable in the sense that as we see that kind of ripple through the economy, overall AI-related spending right now represents just under 1.5% of GDP.
Now, again, that doesn't sound like a lot, but again, if you put the context the fact the overall GDP is some $30 trillion, 1.5% is a lot of money, frankly. And more notably, based on some estimates and some predictions from some people who are at the forefront of this.
They see those numbers growing close to 5%, which would be kind of equivalent to what we spent during the building of the railroad back in the 1800s.
So, this has some implications not only for spending, for the economy itself, but there are some questions, maybe some concerns, that is this beginning to be too frothy, too much? And so, if we talk about the risks, you know, for a second on the financing aspect of it, Rajiv.
you know, there is this notion that many companies now are kind of interlinked together, right? This notion that one company makes something, they sell it to somebody else, and then they take an investment in that company. So this notion of circular finance has become a theme in the past few months or so, and it is raising some concerns.
And we can't deny that, and that's something we have to know, that this is probably a good thing right now, in the sense that many of these companies are kind of building their own ecosystem around this, but should this AI theme begin to fade a little bit, then it could have some… some linkages, and potentially some spillover effects as well, as well, if we're not careful.
Now, the other thing, Rasheed, that I would kind of love to get your thoughts on has to do with, in terms of paying for these… this build-out, many companies thus far have used their own cash flow to pay for infrastructure spending.
Now, going forward, however, according to Morgan Stanley estimates, roughly half of that spending is going to come from the bond market going forward. So again, companies are going to have to issue debt, they're going to rely on private credit, and some other things as well. So how do you think… what are you seeing right now? The credit markets around this AI build-out as where today?
Rajeev Sharma [36:00]
Well, we did see a few jumbo deals come out this week from some of these AI hyperscalers, or some may call them hyperspenders as well. And what's happened here is they've tapped into the debt markets. These companies that have came to market this year have been very high-quality companies, so they did get a lot of investor reception.
A lot of investors were very excited to participate with these new bond deals that came, and the anticipation for 2026 is we're going to get even more jumbo deals from some of these companies that are going to use the debt markets as a way to finance their AI build-out.
Now, my opinion here for credit risk for AI companies is it's kind of a two-level story. On one level, you have those strong firms with solid cash flows, market dominance.
They're relatively insulated from any near-term credit risk. They will find investors to invest with them. They like the high-quality nature of those companies. They like the fact that they have cash flows, so they have strong balance sheets.
But the highly levered companies, they're gonna face some higher risks of volatility next year, I think, and I feel that capital needs and policy uncertainty are gonna play into the factor there for those
Those, higher-levered companies. So if you focus on the large cap companies, they have diversified revenue streams, they have strong credit profiles, and they've shown strong investor reception to those jumbo deals.
The mid-tier firms and startups, they will have to also rely on the debt markets for debt financing. They'll probably rely on venture capital as well.
But rates where they are right now, they could add some refinancing risks for those companies. So there are… there is now developing a wider gap between AI companies, those that are large and those that are mid-tier.
George Mateyo [37:38]
And on the equity side, Steve, I know you've been at the forefront of this team as well for much of this year, if not beyond that.
Any concerns you might have around how these companies, again, are somewhat inter… strictly linked with each other? Again, the circular finance issue is maybe a complicated one, but any… any insights you might have around that idea?
Stephen Hoedt [37:56]
So…
George Mateyo [37:58]
I'm sympathetic to the argument that there are echoes.
Stephen Hoedt [38:01]
from the 1998 to 2001 bubble here. And I speak as somebody who was a technology analyst on the buy side during the bubble, and I was a tech analyst in the 90s and the run-up to it, so I lived it from the inside.
And I'm telling you, when I see the circular financing stuff laid out on this page, I start to get flashbacks to Lucent and Nortel financing, Global Crossing, and WorldCom. And some of those names people on this call may be familiar with, but many of them, they're not. And there's a reason why, because they don't exist anymore.
And I don't think it's exactly the same, because there is… there's more earning power, and there's a real business model behind this. We're not talking about sock puppets and measuring eyeballs with these companies, okay?
But at the same time, I think a bit of caution with some of this is well taken, because I think when you think about, for example, OpenAI,
where does the cash come from for them to do these investments, right? I mean, they don't have cash flow. That's one of those ones where, to Rajiv's point.
You know, there's a big difference between OpenAI going in and making an investment in something, and Microsoft doing it. Microsoft has piles of cash, OpenAI doesn't. So, it really does seem like next year might be a year where we start to get some bifurcation
Of ecosystems in this space based on the financial strength of the companies that are involved with it.
George Mateyo [39:51]
I am going to move right to that direction now, Steve. So, again, we had somewhat anticipated this question, right, around a bubble. We can't ignore the fact that we have to ask ourselves pretty critically if this, in fact, is a bubble. And you were right to point out that there are some differences. I think there's another slide coming up that'll talk about that with a bit more specificity.
But, you know, kind of thinking about a bubble, right? So let's spend a minute, Steve, talking about that. What is a bubble? I don't think no one… no one really has a strong definition around this, and I think, you know, it's… in my view, it's kind of… it begins to galvanize when a new technology takes hold.
It really kind of captures the moment.
At some point, though, that idea becomes commercially viable. I mean, it's one thing to have an idea, but then you need to scale it up to a company of some kind, and then it becomes a real theme. And now, at that point, when it really kind of established itself as an investable theme, you see investors flood into that, and sometimes they overpay for that, and they overextend themselves. They take on leverage, as we talked about.
And at some point, even furthermore, those investments are kind of disconnected from the fundamental values. In other words, the valuation of those companies are not really well that tethered.
to financials and reality, basically. So, at some point, malinvestment occurs, you're making bad investments, basically, and then the bubble bursts.
Now, the other thing that we don't really kind of talk much about on the presentation, but I think it is notable that after the bubble bursts, it's harmful, there's a lot of carnage, frankly, and as you said, many companies go out of business, but new companies in their wake, emerge, and there's usually kind of a big benefit, a second wave, essentially, that can be pretty powerful. I mean, again, look at the internet today, it's ubiquitous.
So, here on this slide, on slide 30, we try to think about, you know, kind of where we are right now, and again, this is more, high level than anything really super specific.
But in my view, anyway, it feels like, yes, we're kind of at the moderate level in terms of these tremendous returns we've seen so far. They're not ex… they're not excessive, they're not extreme. We haven't reached that extreme level, but they are kind of flashing amber a little bit, in the sense that, yes, things are a bit extended, and valuations are still high, but they're not as extreme as they were back then, too.
sentiment seems to be a little more modest, and frankly, every time we talk about this, we talk about bubbles, and if people are talking about bubbles, maybe there… there isn't a… maybe there's a bubble in people talking about bubbles as opposed to a pure bubble. We'll see.
And I think at the same time, yes, we're starting to see leverage creep up a little bit. We haven't quite entered the phase of it really being exotic, but there are some structures out there that are a little bit cautionary.
That we have to be mindful of as well. So I think there's probably some kind of shift from kind of the moderate risk to the more moderate risk category, perhaps sometime next year. And then lastly, this notion around a new paradigm thinking, I haven't seen a whole lot of that just yet, but that'll probably come at some point, too.
Steve, from your perspective, again, using your battle scars that you're gonna use that reference.
What do you… again, how would you compare today versus 25 years ago or so?
Stephen Hoedt [42:32]
Yeah, I agree with your way of laying this out, and, you know, I've told people privately that I feel like if I'm using the 90… the late 90s scenario, my feeling is that it's 1998. I know you're kind of of the opinion that it's sometime in 1999, but…
Like, I think that, I don't see any of the new paradigm kind of talk right now.
And I think if you look at the overall level of adoption, or… or… not adoption, but the overall level of societal, kind of.
this becoming in the Zeitgeist everywhere, it's not there yet, right? And if you go back to 2000,
I mean, who wasn't talking about what was going on with the tech stocks in 2000? I… so I think that we're… we have a ways to go here.
And to your point on the fundamentals.
Again, there's cash flows behind these companies today. They may be 30 to 40% of the S&P 500 weight, but they're contributing over 25% of the earnings power of the S&P 500, and at the same time, they've accounted for almost 100% of the earnings growth over the last 10 plus years.
So, we're in a very different position there compared to 30% of the S&P 500 being in tech and 9% of the earnings power being in tech back in 2000, George.
George Mateyo [44:01]
So, I'm going to just move ahead a little bit, and we can come back to that in a second. I did want to just, you know, again, get us focused on some expectations for this next year as well.
Very quickly before I do that, though, it has been a solid year by all accounts. I mean, we have seen some dispersion among certain asset classes.
But overall, if you just look at slide 37, it shows you year-to-date returns through the end of November. And, you know, we've seen good returns from the bond market in terms of, you know, high single-digit returns.
We've seen really strong performance from equities led by international stocks, interestingly enough, as the dollar has faded, that's actually been a tailwind, but we've also seen some good earnings power there as well. And then certainly gold has been an interesting asset class that maybe we'll get to in the questions, so…
One thing I did want to focus on just a minute, though, in terms of things that people might be thinking about for their portfolio next year, has to do with quality, and I know, Steve and Rajiv, you're big proponents of this idea.
But the notion that quality assets, quality stocks, and quality securities
has really been kind of lagged, and some of these companies have really underperformed. And frankly, some people might be frustrated with the performance, not keeping up with traditional benchmarks, but if you look under the hood, we've seen this rally this year has really been dominated by some of the more speculative companies
in the indices, and that's kind of provided a real headwind for people that focus on quality like we do. So we've actually seen some of our performance metrics
Underperform, not in a really negative way, but really just kind of on a relative basis.
But because, again, we've seen this preponderance of lower-quality companies outperforming, and seeing those stocks in particular do so much better, makes me think that maybe as some of this maturation around AI, maybe some of this more discerning focus that you talked about, Steve.
as people become more discerning, I think quality will matter. So I think one theme that we're going to be talking a lot about next year has to do with the fact that quality companies might be due for a resurgence, as well.
So,
I'll just kind of point out one more thing, I guess, you know, Steve, I need to kind of get… you've done a great job with this every year we've done this now, but I'd be remiss if we didn't talk about maybe kind of drilling down to quality a bit further, how are you thinking about sectors, and then also maybe walk through your expectations for returns next year.
Stephen Hoedt [46:06]
Sure, George. So, you know, I think that, to your point on quality, we'll talk a little bit about that when we get to the next slide for returns for next year, but I think what we see is we see a opportunity for market
performance to broaden out next year, based on the fact that we see a pretty…
a brilliant backdrop from a macro perspective for equities, at least for the first half of the year next year. And…
what that should lead to, in our view, is above average earnings growth. If you think that earnings growth for the S&P 500 historically has chugged along at, say, 8%-ish.
We see low double-digit earnings growth for the S&P 500 in a base case next year, with a bull case, you know, being even higher than that.
And what that leads to is it leads to what you saw in that chart before from a sector perspective, which is, no, it's okay, you can leave it. You see us having tilts toward cyclical sectors, right? So, industrials, materials, financials, certain areas of technology. We expect to perform well.
At the same time, a reversion of quality would see areas like technology, some, software in particular, but also things like healthcare, which has been a kind of a laggard for a while.
performed pretty well, and healthcare's done really well over the last 3 months, as I think investors have started to realize this.
Defensive areas, we don't think, are going to be the place you want to be next year, from a sector perspective.
Now, when I roll out the base bull and bear case here.
as I always say, take this stuff with a grain of salt, don't focus on the point estimates, focus on the thought process behind them.
when we think about the base case and the bull case next year, it really is informed by the strong macro outlook that we have, and that's driven primarily by four things. One, it's driven by the fact that we see an accommodative Federal Reserve
becoming even more accommodative as we move through the year next year. You're going to have a shift to a Dove as the chair. Who knows what will happen between now and then, but it's likely going to be rate cuts, as you saw those forecasts earlier. And, you know, I think it's very hard to bet against an accommodative Fed. That's point number one. Point number two, it is a midterm election year. You notice this the first time we've brought up the fact that it
it's an election year on this call. We don't focus on the politics here, but…
The… the history here tells you that the party in power, whether it's the blue team or it's the red team, and right now it's the red team.
They like to spend profligately in an election year. So that means we're going to have a fiscal tailwind from money falling out from the sky from Washington, D.C. So that's point number two. Point number three.
Have we really talked at all about deregulation on this call so far, George?
I don't think so.
we see deregulation really moving to the fore next year, because it's a way for the administration to, again, kind of grease the wheels without having to spend money from DC itself. They just…
Maybe they'll be able to unleash
credit from the banks. Maybe we'll see a wave of merger and acquisition activity, whatever it be. We see regulation coming down. And then the fourth thing is tied to AI and other things, we really do see infrastructure spending being something that is going to be a theme here domestically as we move next year. All four of these things
Are unabashedly positive for earnings growth on a year-over-year basis, And… Economic growth.
Clearly. Because economics growth translates to earnings growth.
So, with that said, we see 12% earnings growth up in a base case to $3.50 a share from the S&P 500,
multiple contracts slightly from where we're at today, which is above 23, or in a neighborhood between 22 and 23. I mean, that gets you to a 7,700 number for the S&P 500 for next year, which is a 12% price return from the levels we're at today.
That's our base case, and we have a pretty high probability on that base case, if we were putting probabilities on these numbers.
The bull case, I actually think I kind of truncated the bull case, because I didn't want to put what it could be. If we are in a bubble.
So what you see here is a little bit better earnings growth, say 14%.
keep the multiple at 23, and you get to almost $8,300 on the S&P.
If I was going bubble here, you would see the…
multiple expand to 25. We saw 25 times forward earnings in the bubble period in the
90… late 90s, early 2000s, that's how you get to the number where you see some strategists talking about 9,000 on the S&P. That's not our bull case, but I'm just telling you how they get there with the numbers that you see on this page.
So, we think the bull case is $8,300. Bear case is a, a little bit less than what you are used to seeing us forecast for the bear case, because we would see a decline in earnings to $280.
Multiple contract modestly in the scenario that we've got with the economic backdrop being as strong as it is, and only an 18% potential decrement.
I would tell you that my feeling, George, is that I probably would put a 10% or less on the bear case here, and it really does come to me down to saying, how probable is a bull case outcome relative to a base case outcome as we move through the course of the year next year?
I would also say, though, too, that we think that these returns are likely going to be front-loaded in 2026.
Because once we get to the middle of the year and we get that new Fed chair in May, if we do have a scenario where inflation is ripping because the economy is ripping, it might not be as easy for the Fed to be as accommodative as what we… what we think they might be, or the market is thinking they might be.
Which could lead to a little bit of choppiness and some rough sailing in the back end of the year next year. But basically, from now through the middle of the year, we think this is a really, really strong backdrop for equities.
George Mateyo [52:42]
Excellency, thanks very much. I know we're getting close to the top of the hour again, so Brian, let me just turn it over to you. I know there's probably a lot more questions we have time for, but, let me just kind of pull you in and see if there's questions we try to anticipate, or maybe even take a couple from the,
the line.
Brian Pietrangelo [52:58]
Yeah, the good news, George, is out of the 130 questions we received pre-submitted, as well as some of the questions coming in online right now, they've aligned extraordinarily well with how we've constructed the presentation today, especially on topics like Federal Reserve policy, artificial intelligence, the national debt, the overall market. So, I think we're pretty good there, but we will have a couple if we have time at the end, after we go over these questions that you have on the screen.
So last year, we did the top 5 questions we asked ourselves for 2025. We're doing the same thing this year for the top 6 questions for 2026. So let's start off with you, George. Will we think the economic momentum will continue, and will in a recession be avoided in 2026?
George Mateyo [53:40]
The short answer is yes. I think it is fair to say, as Steve pointed out, this is not going to be a straight line to prosperity, but… and I think even, you know, just to the point of the equity market, which I know that's really Steve's domain, but
you know, even in 1999, I think we had a number of rolling corrections there as well. But, you know, irrespective of that, I think it is fair to say that, in our view, the economic momentum that we've seen in the back half of this year, that's likely to persist.
Mainly because of, as Steve pointed out, an accommodated Fed. Interest rates, in other words, are likely to be kind of flat to down, and some of the stimulus measures that have already been passed, basically, I think will also probably be somewhat stimulative. Now.
I would say that the employment situation is cooling, and again, there's more of a… that narrative's building a little bit.
It'll be interesting to see how much of that is really, kind of, generated around… the overall weakness of the labor market is generated from the labor market.
itself versus the economy. In other words, are companies just not hiring right now because of AI or other things?
immigration might have some influence there, but, you know, maybe this is a situation where the overall labor market doesn't do spectacularly well, but the overall economy can do well. Typically, they're more interlinked, so that's why I'm a little bit hesitant to say that, you know, again.
all off to the races, because I do think that I think the labor market does bear monitoring, but this is an interesting situation where maybe we're going to focus more on the real economy as opposed to just the labor market itself. So, there are some risks to the outlook, but I think overall, Brian, the overall economic momentum continues, and yes, the recession will be avoided in 2026.
Brian Pietrangelo [55:10]
Great, thank you, George. Our second question we already addressed. Steve just did a good job on that, so we will skip two, which is the AI bubble, and if so, will it burst? And we'll go to number 3, which is, will leadership changes at the Fed mean for interest rates? We discussed this already within the presentation, but there was a question that did come in from Gary online, as well as some of the pre-submitted questions. Now, we do not do a point forecast on the 10-year Treasury yield, but Rajiv
What are your thoughts in terms of how we think about it within the Chief Investment Office here at Key Wealth?
Steve's shaking his head that Rajiv gets a pass. But let's talk about it more in terms of a range, Rajiv. What do you think the range might be, and the reasons for that range?
Rajeev Sharma [55:51]
Well, I do think there are uncertainties in the market, and as long as there's uncertainties, if you look at the 10-year, it reflects those uncertainties about the economy. It reflects the uncertainties about, will the Fed be able to achieve its dual mandate, especially with new leadership?
I do think that the tenure has…
Found its range, which is between 4% and 4.25%.
And I think it stays in that range for a couple of reasons. One, we do have more supply coming to market. That does put upward pressure on yields, keeps it to where it's at, elevated above 4%.
We have seen buyers step in when we get close to that 4.25% point, so that allows that range to come back down. So I do think we stay in this range right now for 2026, between 4% and 4.25%.
Brian Pietrangelo [56:34]
Great. Thank you, Rajiv. And number four, Steve, you already gave your opinion on this in terms of the possibility for a fourth year of consecutive gains, but maybe just talk a little bit about that concentration risk in the MAG7, and then we'll go forward to the next question.
Stephen Hoedt [56:48]
Yeah, I do think that you're not gonna see the MAG7 be the place to only be in 2026. That broad-based earnings growth
Should move across sectors and industries, and again, that's part of the reason why we really do favor cyclical sectors and industries as we move into 2026.
Brian Pietrangelo [57:09]
Great, thank you. And number 5, George, you touched upon this already, but just a quick overview again on the concept of worry about the national debt.
George Mateyo [57:19]
Well, it's always a worry, so I don't want to downplay that, and I think the first person that I'm going to look to to see if it becomes a real worry is probably Rajiv, and there's a few folks on this team that focus on this maniacally, but I think right now it feels like the U.S. is in still a pretty advantageous position in the sense that we have this
There's a great system around entrepreneurship.
around, you know, the rule of law, deep capital markets, all these things kind of give us some really structural advantages that, irrespective of our debt situation, still, people like dollars. They kind of view the dollar as the reserve currency.
They are using the dollar less, so again, the overall share, I guess, has come down, and we have to be, you know, wide-eyed about that.
But overall, the dollar's still in a preferred position, if you will. So as I say here, we shouldn't abuse this position. And I think this is one of the things that also, it becomes a problem when it becomes a problem. In other words, we probably shouldn't make an investment case around this.
anticipating a problem until it becomes a problem. Now, that sounds a little bit cavalier, but… and I don't mean to be, but I think it's something we can worry about, and we have to be mindful of, but I wouldn't, I wouldn't take any action preemptively, because we just don't know when that moment could come.
Brian Pietrangelo [58:28]
Great, thank you, George. And our final question we've already somewhat answered, should investors get out or stay away from the markets until the midterm's passed? Unequivocally, no.
Thank you, Steve, for your thoughts on that, and that will wrap us up for today in terms of these questions. I know we're approaching the top of the hour. We'll try to reach out to all of you, but you can also see what we write and think on a regular basis through our Key Questions articles, hosted on Key.com and on LinkedIn, as elsewhere, in terms of our regularly scheduled content that we do produce
from the Chief Investment Office here at Key Wealth.
So I will close by saying, a reminder, sometime in roughly the next week, we will send out a link to the recording that will also include the deck that we discussed today. I will simply say, George, Steve, and Rajiv, thank you so much for providing your wisdom during today's call. Thank you to our audience for participating and submitting the questions, and on behalf of everyone here at Key Wealth and KeyBank in general.
We'd like to wish you and yours a happy holiday season as we head into December. Thank you, everybody.
In this webinar replay, the Key Wealth Chief Investment Office team shares timely perspectives from December 2025 as we stand at the threshold of the second half of the decade and approach the 250th anniversary of the United States. Against a backdrop of unrelenting change, prolonged uncertainty, and significant disruption across critical sectors of the economy and society, the team explores the forces shaping the investment landscape. Viewers will gain insight into how these dynamics are influencing markets, portfolios, and long-term strategic thinking as we look ahead to the years to come.
The team delves into three major areas of change they predict investors will likely face in 2026:
- Changes within our political systems and norms
- Technological changes (e.g., artificial intelligence)
- Changes within the investing landscape and market structure
Topics addressed include:
- The outlook for inflation, interest rates, the Fed, and the US consumer
- Artificial Intelligence and its impact on the economy and financial markets
- Actions investors should be taking now
Speakers:
- George Mateyo, Chief Investment Officer
- Rajeev Sharma, Head of Fixed Income
- Stephen Hoedt, Head of Equities
- Brian Pietrangelo, Managing Director of Investment Strategy