CWMG Outlook 2026: The Policy Engine

At CWMG’s Outlook 2026: The Policy Engine event, VP of Investments Debbie Boisselle shared her thoughts on where the markets, economy, and government policy may be heading. While the news often focuses on uncertainty, her overall message was hopeful but realistic: the long-term outlook is still strong, even if there are short-term ups and downs.

The Economy: Facing Challenges, Making Progress

Inflation is still affecting prices, especially for food and energy. However, the economy is expected to improve as the year goes on. Growth in technology and artificial intelligence, along with continued innovation, should help support GDP.

Housing remains a challenge. Higher interest rates and a limited supply of homes have made buying more difficult. Builders are constructing fewer homes because rising costs have reduced profits. Homes that are listed for sale tend to sell quickly, but higher-priced homes are moving more slowly. Many homeowners are also holding on to their low mortgage rates instead of selling. The good news is that mortgage rates are expected to gradually come down over time.

Stock Market: Staying Invested for the Long Term

The U.S. stock market is now in its fourth year of a bull market, which means prices have generally been rising. In the past, markets have often done well after the Federal Reserve lowers interest rates—even when those cuts happen near market highs. At least one rate cut is expected, which could support stocks.

Artificial intelligence continues to play a big role in market growth. Large technology companies are spending heavily on AI, which is helping drive earnings. The biggest tech companies, sometimes called the “Magnificent Seven,” continue to have a strong impact on overall market performance. It’s also important to remember that election years often bring more market swings. That pattern is already starting to show this year.

Bonds: Choosing Carefully

In the bond market, the 10-year Treasury yield is closely connected to expectations about Federal Reserve policy. Right now, investors are not being paid much extra for taking on additional risk in many types of bonds. Because of this, careful bond selection is especially important.

Investment Strategy and Opportunities

Investors should continue to hold a mix of investments. While the S&P 500 remains important, spreading money across different types of stocks can reduce risk. Growth stocks are benefiting from innovation, while value and blend stocks offer dividends that compete with bond income. Mid-sized and smaller companies may offer good opportunities later in the year as economic growth spreads to more areas. International stocks have also improved and, in some cases, have performed better than U.S. stocks after lagging behind for several years.

Alternatives, Commodities, and the Dollar

Mergers and acquisitions are increasing, which shows that companies are feeling more confident. In commodities, global tensions, demand from AI, and limited supply could lead to rising prices. Gold and silver have done well recently, but energy and other natural resources remain important to watch. The U.S. dollar has weakened somewhat, but it is still the world’s leading currency. There are no signs of that changing anytime soon.

The Bottom Line

Markets may continue to experience ups and downs, especially during an election year. However, the long-term outlook remains positive. Innovation, diversification, and patience will continue to be key for investors moving forward.

To learn more, view the entire presentation here. Need help with financial planning or have retirement questions? Contact Citizens Wealth Management Group today!