Wall Street narratives rarely stay still, and recent weeks have underscored how quickly sentiment can change as perceived new information challenges the status quo. Widely discussed anxiety over a potential artificial intelligence (AI) bubble fueled by relentless capital spending on data center infrastructure has now transitioned into a broader set of worries about industry ‑ level disruption driven by rapidly advancing AI platforms. The software sector has been in the eye of this storm, with legacy enterprise vendors suddenly confronting fears of displacement. That concern has ignited a negative feedback loop that is fueling a ‘sell

After a stellar 2025 in which emerging market (EM) equities returned 34%, 2026 is off to a good start with the MSCI EM Index up 7% year to date. Last year’s near doubling of the S&P 500 return was driven mostly by a weakening U.S. dollar, which propped up EM returns, but attractive valuations and artificial intelligence (AI) investment played a role. This week we highlight five reasons we’ve warmed up to EM. 

#1: U.S. Dollar Looks Like It Wants to Go Lower

Given the dollar was one of, if not the biggest drivers of EM outperformance last year, we’ll start there. The U.S. Dollar Index is on the cusp

Key Points:

• In an April 2025 speech¹, Kevin Warsh laid out a few important concepts that will likely define his leadership goals at the Federal Reserve (Fed) if he is confirmed as expected.

• According to Warsh, the Fed has expanded far beyond its statutory remit, from fiscal interventions (e.g., persistent quantitative easing) to political and cultural issues (climate, inclusion), weakening credibility and independence.

• Mission creep and failure to retrace emergency actions from 2008 onward have created “economic imprinting,” making the economy more fragile, increasing debt, and encouraging p

The Federal Reserve (Fed) enters 2026 navigating potentially constrained policy conditions as resilient growth and above ‑ trend inflation intersect with an increasingly unsustainable fiscal trajectory. Fed Chair Jerome Powell emphasized that federal debt growth requires eventual corrective action, even if near ‑ term market risks remain limited. Rising primary deficits at near full employment further limit long ‑ run policy flexibility, while expanding Treasury financing needs — and a growing reliance on short ‑ duration bills — heighten rollover risk and amplify sensitivity to the Fed’s policy rate.

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