2026 Outlook

THE YEAR 2025 was a good example of the prevailing regime. In fact, capital market conditions in the post-COVID-19 market era, and more broadly, since the Great Financial Crisis, have all been very similar. That is, we are witnessing markets that are being driven less by fundamentals and traditional business cycle dynamics and more by fiscal and monetary policy influence. While policy has obviously long influenced markets, its role has grown more prominent in an era increasingly shaped by factor-based strategies, momentum, and the proliferation of passive investing. As fundamentals have taken the back seat, policy decisions have clearly emerged as one of the most impactful forces driving market direction.