The Changing of the Guard

Kevin Warsh, the new chair of the Federal Open Market Committee, has an initiative to modernize the way policy is developed, and he has established five task forces to evaluate the current process and deliver recommendations for improvement.

He framed the initiative around a simple reality: the U.S. economy looks very different today than it did a generation ago. With rapid technological change and shifting labor market dynamics, the Federal Reserve (Fed) is undertaking a broad review of how it conducts monetary policy. The five task forces have been charged with examining whether the cent

Coming into 2026, we expected inflation to move closer to the Federal Reserve’s (Fed) 2% target, the Fed to cut rates by roughly 75 basis points (bps), and Treasury yields to drift lower. Instead, the first half delivered three stress tests in rapid succession: a leadership change at the Fed, a geopolitical shock that sent oil prices and yields surging, and an AI buildout that is having a measurable impact on the corporate bond market — with the Fed leadership transition among one of our key themes for the balance of the year. While these tests are likely to linger throughout the rest of 2026, starting yields are still comfortably

Alternatives Gain Importance as Market Complexity Rises

As highlighted in LPL Research’s Midyear Outlook 2026, Policy, Buildouts & Bottlenecks, investors continue to navigate a market environment shaped by evolving policy decisions, geopolitical uncertainty, and shifting economic expectations. Against this backdrop, maintaining a diversified and balanced portfolio has become increasingly important, particularly as traditional asset classes face periods of heightened correlation and elevated volatility. The first half of 2026 has been marked by heightened uncertainty. Shifting interest rate expectations, persistent geo

LPL’s Midyear Outlook 2026 has arrived. While much of the report provides the types of content you might expect from LPL Research, such as forecasts for GDP, earnings, and interest rates, this edition of the publication is unique in its focus on four key themes that we believe will shape capital markets performance in the second half. Here we focus on one of those themes: AI’s Next Act.

Evolving AI Narrative

AI is likely to remain a key driver of equity markets during the second half of 2026, but the narrative is evolving. The market is shifting from enthusiasm over AI infrastructure spending and rapid earnings g