Highlights from the week of September 18 – September 24, 2026.

Key takeawaysThis is a recalibration, not an inflation crackdown. The Fed is taking back last year’s insurance cuts because the economy can stand on its own. Rates can’t fix a supply problem. Higher borrowing costs won’t build power capacity, produce advanced chips, or reverse geopolitical disruptions, limiting the benefit of additional hikes. Higher yields create a better bond backdrop. With the economy able to absorb tighter policy and markets already pricing in substantial adjustment, measured duration can offer attractive income and upside if long-term yields fall.

Last week, America was told inflation is better. Also worse. Also, by Friday, core consumer prices came in hot and consumer sentiment fell off a cliff—which is a lot to hand somebody just days before they decide on interest rates.

Last week, America continued its situationship with the economy: lots of mixed signals, no definitions, with no idea where this is headed.

Artificial intelligence is overheating one part of the economy. The Federal Reserve can only cool all of it.

As the market broadens beyond the AI trade, shifting Fed signals and lofty earnings expectations demand more active judgment.

Growth now takes far more investment than it used to. Trade is reorganizing, energy risks are rising, and inflation lingers.

New Fed Chair Kevin Warsh appears ready to give markets fewer signals. That may give the Fed more flexibility, but it also gives every data point more power to move markets.

Elevated coupon income should continue to support senior loan returns in the second half of 2026, but tighter valuations and rising sector dispersion...

The back half of 2026 may hinge on six themes: AI spending, uneven growth, labor supply, sticky inflation, uneasy central banks, and volatile bond markets.