Hedge fund manager and investor Mitchell Feierstein said Wednesday that Americans should brace for a volatile stock market in 2026, even as interest rates begin to fall and some economic conditions improve under President Donald Trump's policies.
On Newsmax's "The Record With Greta Van Susteren," Feierstein told guest host Tom Basile that the Federal Reserve is likely to cut interest rates multiple times next year.
"I think next year we're going to see two to three interest rate cuts, at least," Feierstein said.
"But the markets will have volatility. Think stocks down in the first quarter."
Feierstein said the Federal Reserve's problems extend far beyond who occupies the chair's seat; Trump said he will replace Jerome Powell as the central bank's chair when his term expires in May.
Feierstein said the entire system needs to be restructured or dismantled. He traced the Fed's current dysfunction to what he described as decades of policy drift.
"The entire Federal Reserve system is broken," Feierstein said, arguing that the central bank strayed from its dual mandate of price stability and full employment.
He criticized the Fed for focusing on issues he said fall outside its mission and for opposing Trump's economic agenda early in his second term.
Feierstein said recent market performance shows how wrong many economists were about the economy.
He noted that commodities dramatically outperformed equities over the past year, citing gains of 65% in gold and 140% in silver, while major stock indexes posted far smaller advances.
"The Fed has kept interest rates too high," he said, calling the central bank's track record "40 years of policy mistakes."
Looking ahead to 2026, Feierstein said employment trends will be a major challenge, pointing to what he described as inflated job numbers during the Biden administration and wages that failed to keep pace with inflation.
"We had cumulative inflation of 27% during the Biden administration, and wages were nowhere near that," he said, adding that inflation outpaced earnings "by multiples."
Feierstein acknowledged signs of improvement, including lower inflation and stronger economic growth, but cautioned that recovery will take time.
"Nothing's going to turn around on a dime," he said.
"President Trump is a businessman. He's got policies in place that we've got to stick with."
He urged Americans to closely watch the 10-year Treasury yield, which he said should fall as rates are cut, easing borrowing costs for mortgages, credit cards, and business loans.
"That's the way forward for 2026," Feierstein said. "But the markets will have volatility."
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