2026 Will Be a Roller Coaster Market (Here’s How to Survive It) w/ Michael Lebowitz

Quick Overview

Michael Lebowitz predicts that 2026 will be a volatile "roller coaster year" for markets, driven by the Federal Reserve's policy path regarding Quantitative Easing (QE) and the potential for political uncertainty surrounding Donald Trump, suggesting that while gold and silver have performed well recently, the market's focus will shift to how the Fed navigates these factors, potentially leading to high volatility and a downward trend in valuations for high-flying sectors like AI.

Key Points: Michael Lebowitz expects 2026 to be a volatile "roller coaster year" for markets due to Fed policy uncertainty and political factors. The Federal Reserve's ongoing Quantitative Easing (QE) is likely to persist for more than a few months, despite reserves shrinking, as they seek to add liquidity. Lebowitz suggests that if the Fed's decision on the tariff case is delayed, the market will react strongly, with expectations that the Fed will be forced to cut rates or engage in further easing. The current narrative favoring high-growth sectors like AI might change if the Fed continues its hawkish stance, as high valuations could face pressure. Gold has performed well over the last 5-6 years, while silver has shown recent strength, benefiting from inflation hedging demand, though silver's performance is less parabolic than in past bubbles (like 2008 or 2011). A key risk is that if the Fed continues tightening, the market could see a "de-leveraging" or a downward shift in valuations, especially for highly valued stocks like those in the AI sector.

Context: This episode of the Milk Road Macro podcast features host John Gillen interviewing Michael Lebowitz, CFA, a portfolio manager with over 35 years of experience in financial markets, focusing on trading, portfolio construction, and risk management. The discussion centers on macroeconomic outlooks for 2026, particularly concerning Federal Reserve policy, inflation, and the potential impact of political events like the upcoming election on market dynamics.