Third Quarter Predictions, 2026

• Unless global tensions dramatically flare up again, crude oil prices could stay lower than they were during the worst of the recent crisis in Iran. This could result in reduced inflation expectations moving forward. If so, the Federal Reserve may not need to be as aggressive as some fear in raising the overnight rate in the near future. (1)
• At some point, the growth rate for new investment in artificial intelligence technology (AI) is likely to slow. It isn’t a question of “if” as opposed to “when.” The reason is pretty simple. It is a lot easier to grow, say, 25% off of a $1 million base than it is from a $100 billion one. You can think of it as the law of large numbers.
• According to some estimates, the S. cattle herd is at its lowest level in decades. Unless farmers can figure out a way to grow cows more quickly and cheaply in a hurry, U.S. consumers could continue seeing beef prices remain higher than anyone would like. (2)
• If current political trends continue, Andy Burnham could emerge as a leading contender to become the next prime minister in the United Kingdom (PM). If so, he will inherit something of an ongoing mess, which not even Superman could clean up in a short period of time. Regardless, Britons will probably tire of him as well, and potentially demand yet another PM in the not-so-distant future. (3)
• The war in Ukraine appears likely to continue, as both sides are now so committed to the conflict neither will compromise in the absence of something completely unforeseen happening.
• Over the next several years, steadier procurement orders from the Pentagon lead to greater efficiency gains in the defense industries. Time will show that steadier procurement schedules could reveal greater operating efficiencies than periodic production cycles have allowed. They just did what they had to do to generate the profits they needed to generate.
• There are often two primary fuels for a strong stock market rally: cheaper money and greater profits. Not surprisingly, the two often go together. With future rate cuts appearing more unlikely, corporate America will likely have to exceed expectations in order for stocks to outperform their strong results of the last several years. It will be a pretty neat trick if it can pull it off. (4)
• The ‘spot price’ of gold fell over $600/ounce during the second quarter of 2026. (5) That is the bad news. The good news for gold is that central banks and governments around the world keep on creating money at a feverish pace. (6) As such, the supply of global currencies should increase faster than the supply of gold. This could support investor demand for gold, which some view as a long-term store of value despite its price volatility.
• The massive volume of U.S. Treasury could put upward pressure on longer-term interest rates. Diminished inflation expectations due to potentially lower crude prices could put downwards pressure on them. (7) The new Fed Chairman, Kevin Warsh, is just that: new. As such, it is unclear what support the Warsh Fed will give the markets. (8) Therefore, the best prediction for the bond market is: if you liked it during the first half of the year, you might like it during the second half of 2026.
• The upcoming mid-term elections likely won’t produce either a best-case or worst-case scenario for either political party. The probable-case scenario is the average American voter will wonder how much worse the dysfunction in Washington will have to get for things to start to get better.
• At the end of the second quarter, a World Series between the Tampa Bay Rays and Milwaukee Brewers was a real possibility. If it becomes a probability after the All-Star Break, the folks selling advertising at Fox might start quitting in droves. (9)
• A super El Niño in the Pacific Ocean coupled with abnormally dry conditions in many important growing regions across the globe might result in lower crop yields. (10) Obviously, this could put upward pressure on food prices, and there is little the world’s central banks can do about it. Until the Fed can figure out how to make it rain, the weather report is more economically important than many realize.

SOURCES:

1. Reuters – Oil Prices Fall 1% to 4-Month Lows as Progress in US-Iran Talks Cools Price Concerns. June 30, 2026.
2. NPR – Why the U.S. Cattle Herd is at a 75-Year Low – and What It Means for Beef Prices. May 29, 2026.
3. com – Voices: Sir Keir has Left a Fiscal Mess for Andy Burnham to Clean Up. July 1, 2026.
4. The Economist – America’s Bull Market Has Entered Its Manic Phase. June 16, 2026.
5. GoldPrice.Org.
6. StreetStats Finance – U.S. & Global M2 Money Supply. Accessed July 2, 2026.
7. Fiscal Data Treasury.gov – What is the National Deficit? Accessed July 2, 2026.
8. The Wall Street Journal – Warsh Wants the Fed to Talk Less. That Only Gets Wall Street to Listen Harder. June 30, 2026.
9. Com – Standings.
10. National Integrated Drought Information System Drought.Gov – Global Drought Conditions. Accessed July 2, 2026.

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