Fourth Quarter Predictions, 2026

 

1. Unless something completely unforeseen happens, the quasi-war with Iran is likely to continue for a while longer. Absent a major escalation, the government in Tehran isn’t likely to completely collapse unless the U.S. invades and occupies the country. There probably isn’t much appetite in Washington or the American heartland for that sort of thing. (1)
2. The rift between Canada and the United States will likely persist. This likely has as much to do with an apparently difficult relationship between Canadian Prime Minister Mark Carney and President Trump as it does with trade and economics. (2)
3. Higher fertilizer and diesel prices coupled with an especially difficult summer growing season in much of Europe could put upward pressure on agricultural prices over the next several quarters. (3)
4. Absent a resolution of the conflict with Iran and a subsequent decline in energy prices, it is difficult to envision interest rates falling substantially in the near term. The sheer supply of debt in the United States, let alone the entire global economy, could eventually start to stretch the markets’ ability to absorb it. (4)
5. Unless there is some immediate relief in the upcoming data, the Federal Reserve will likely continue to combat “cost-push” inflation with “demand-pull” techniques. It remains to be seen how effective this will be absent a sharp decrease in consumer spending.
6. With some exceptions, the upcoming midterm elections will likely boil down to a relatively small group of people who bother to vote for the candidates they dislike the least.
7. Unless basic economics no longer applies, the great democratization of private equity and private credit could put downward pressure on expected returns over time. The reasoning is simple. The more money there is “chasing” a finite number of deals, the more expensive the deals could become. The more expensive the initial cost, the harder the investment has to work to generate the expected return. Voila. (5)
8. After last year’s dreadful totals, this year’s “super El Niño” in the Pacific Ocean could produce greater-than-average snowfall across much of the Rockies. More than a couple of ski resorts will be happy if this prediction comes true. (6)
9. As of September 18, analysts were forecasting strong earnings growth for the S&P 500. Intuitively, higher interest rates and energy prices probably aren’t conducive to rapid economic growth. While stranger things can and might happen, it is possible a slowdown in U.S. GDP over the next several quarters could result in revised earnings estimates. The stock market’s reaction to this will likely depend on the severity of any negative revisions. (7)
10. At the end of September, there were probably some nervous ad salespeople at FOX rooting against a Tampa Bay Rays and Milwaukee Brewers matchup in the World Series. Who were they hoping for instead? Any league appropriate combination of the Yankees, Red Sox, Dodgers and Cubs. Take your pick. (8)
11. Unless the Fed’s “demand-pull” inflation-fighting techniques work, we probably shouldn’t expect beef prices to fall much over the next several months. There just aren’t enough cows in the United States, and they don’t seem to grow as rapidly as we would like them. (9)
12. The public furor over data centers will likely start to ease over the next several quarters. If it does, it could have less to do with changing views about data centers themselves than with a slowdown in the pace of new construction. At some point, supporting infrastructure simply must catch up. (10)
13. It seems it has been a while since the North Koreans have really spooked the rest of the world. It is possible folks have become somewhat desensitized to Pyongyang’s provocations. Regardless, history suggests the Kim family tends to behave in a, let’s call it, antisocial manner during periods of heightened tension or diplomatic stalemate. (11)

 

Sources:

1. AP News – Iran Indicates It’s Received An Official US Response to Its Latest Offer on Ending the War. September 30, 2026.
2. Reuters – Canada to Retaliate for US Tariffs, Worsening Ties After Talks Fail. August 22, 2026.
3. Farm and Dairy – Skyrocketing Fuel and Fertilizer Costs Leave Crop Farmers Unable to Break Even. September 22, 2026.
4. Financial Times – US Government Debt Rout Triggers ‘Vicious Loop’ of Selling. September 30, 2026.
5. McKinsey & Company – Private Credit Market Enters a New Phase. June 8, 2026.
6. Climate Prediction Center – Seasonal Outlook. September 17, 2026.
7. FactSet – Earnings Insight. September 18, 2026.
8. Reuters – NBC Scores Strong Ratings During Wild-Card Round. October 2, 2026.
9. NPR – Why the US Cattle Herd Is At a 75-Year Low – And What it Means for Beef Prices. May 29, 2026.
10. Annenberg Public Policy Center – Opposition to Local Data Centers Rises Sharply, Annenberg Survey Finds. August 11, 2026.
11. Beyond Parallel – Database: North Korean Provocations. Accessed May 28, 2025.

 

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