A risk that is easily overlooked in 2026 is: what happens if policymakers really pressure the Federal Reserve?

Suppose the new Fed Chair significantly cuts interest rates, and is forced to keep rates low during a rebound in inflation. What would the market face? The performance of long-term assets could be quite poor. This is not an extreme assumption—historically, whenever central banks are hijacked by political factors, asset pricing tends to go awry.

The key is inflation expectations. Once the market believes that the central bank won't truly fight inflation, long-term interest rates will rise rapidly, bonds will decline, and risk assets will come under pressure. So rather than guessing how much prices might fall, it's better to focus on this policy trend itself.