What’s Next?
July 24, 2026
The debate over interest rates continues.
Should the Federal Reserve raise rates? Should they keep rates where they are? Or is it finally time to start cutting them?
Why do interest rates matter so much? They affect nearly every corner of our economy—from mortgage rates and car loans to credit cards, business borrowing costs, savings accounts, and investment returns.
In my experience, interest rates tend to impact the market when they move in a meaningful way, not when they are rangebound.
I’ll be the first to admit that I thought interest rates would be lower by now. The facts changed.
To me, that’s a great reminder that the market doesn’t care about our predictions. That’s why I’ve always believed it’s better to adapt to what the market is actually doing than to become attached to a forecast.
Right now, the Fed is dealing with a bit of a push and pull.
On one hand, there are good reasons for the Fed to remain patient. Inflation has come down significantly over the last few years, but the job isn’t finished. It’s still above the Fed’s target, and oil prices remain something to watch. If they move meaningfully higher and stay there, they could put renewed pressure on inflation. That’s why some believe rates should stay where they are for now—and a few are even calling for another hike.
On the other hand, there’s a good argument for leaving rates alone. The economy is still growing, but it’s not exactly blowing the doors off. GDP came in at 1.5% in the second quarter. Wage growth has largely kept up with inflation, so consumers have continued to spend. If that’s the case, what’s the rush to raise rates?
Personally, I think the Fed stays patient for now. The kicker is Kevin Warsh is under a lot of pressure to lower rates, and he’s in a tough spot. No matter what he does, he’s going to have people criticizing the decision.
Let’s zoom out for a minute. Interest rates have been in a range for the last two and a half years. We’re near the top end of that range today, but we’ve been here before.Markets have been taking a breather for the better part of the past 7 weeks.
That’s not unusual after the strong run that took us to new all-time highs.
After a strong move higher, markets need time to catch their breath. Sometimes that means pulling back. Sometimes it means going sideways for a while. That’s simply how markets work.
To me, this feels like a pullback that’s running its course—not something to worry about.
It’s healthy and creates good long-term opportunities.
Instead of looking in the rear view mirror, let’s focus on what’s in front of us.
Over the next couple of weeks, I think there are three things that deserve our attention: earnings season, oil and the situation with Iran, and next week’s Federal Reserve meeting.
Earnings
In my opinion- this is the most important thing for markets. Headlines can push stocks around in the short run, but we’ve always said that stock prices follow earnings.
Companies are coming off a quarter where we saw double-digit earnings growth for the sixth consecutive quarter. Will the second quarter make it seven?
About one-third of the S&P 500 is scheduled to report earnings next week, including many of the largest tech companies.
I’ll be paying attention to how much these companies earned and how those results compare to a year ago. But more importantly, I’ll be listening to guidance for the rest of the year.
Earnings have been excellent, but that also raises expectations. When expectations get high, even a small disappointment can lead to selling.
Oil & Iran
The second thing I’ll be watching is oil.
We’ve been here before. Tensions in the Middle East rose again this week, and that immediately put oil back in the spotlight.
Any prolonged move higher can have negative effects on the economy.
Higher oil prices don’t only affect what we pay at the pump. They also impact many other parts of the economy, including manufacturing and shipping. If prices stay higher for longer, those added costs can start to hurt.
We said a few months ago that oil was the wildcard for the economy. So far, it hasn’t had a major impact.
But we still believe $100 per barrel is the level we want oil to stay below—even if only for psychological reasons.
The Fed
The third thing I’ll be watching is next week’s Federal Reserve meeting.
I don’t believe they’ll raise interest rates, and I’d fall out of my chair if they cut them. Rates have been in this range for about the past year, and I think that’s where they stay for now.
Markets will be more focued on what the new Fed chairman Kevin Warsh has to say in his comments.
If he hints towards hikes, or fears of inflaiton the market might throw a tantrum.
To sum it up… the market has had a solid year, and I understand why it’s been taking a breather.
Over the next few weeks, earnings, oil and the Fed will be driving most of the headlines.
Just remember… stocks don’t go up every day. They don’t go up every week. And they don’t go up every month.
Zoom out just a little, and the bigger picture still looks just fine.
As long-term investors, your time is better spent enjoying the summer than worrying about every tick up and down in your investment account.
Links to this week’s videos are below.
Have a great weekend! It’s also easy to forget that today’s interest rates are actually much closer to their historical average than the near-zero rates we got used to over the last decade.
And the market has continued to move higher.
Nobody knows exactly where interest rates will be six months from now. But we do know that markets have always found a way to adapt. I wouldn’t bet against them now.
Have a great weekend!