This month, Phillip Neuhart and Blake Taylor discuss where markets and the economy stand midway through 2026. The US economy has shown notable resilience despite a volatile first half, marked by geopolitical shocks, rising energy prices and new leadership at the Federal Reserve. The outlook is similar to where the year began, with one key exception: inflation has moved higher. Chairman Kevin Warsh’s first FOMC meeting underscored a renewed focus on returning inflation to the Federal Reserve’s 2% target.<br><br>Strong earnings continue to drive financial markets higher. While large technology firms are leading the way, performance continues to broaden. In fixed income markets, higher interest rates help reinforce our long-standing view that portfolio balance and long-term discipline remain essential in navigating an environment defined by both resilience and evolving risks.<br><br>For more information, visit https://www.firstcitizens.com/wealth/market-outlook/2026/making-sense-june-market-update.

Market Update | June 2026

Making Sense

# Full Transcript

**Podcast:** Making Sense

## Transcript

[SPEAKER_A] Hi, I'm Amy Thomas. Today is June 24th, 2026, and I want to welcome you to our monthly Market Update series. Today, Phillip Neuhart and Blake Taylor, members of our Market and Economic Research team, will take a deep dive into what's happening in the markets and the economy. As always, the information you're about to hear are the views and opinions of only the authors at the time of recording and should be considered for educational purposes only. This should not be considered as tax, legal, or investment advice. And with that, Phil, we're ready to go. So I'll turn it over to you.

[SPEAKER_B] Thank you, Amy, and welcome everyone. And Blake, thank you for joining us again with Brent away. What are we going to cover today? There's plenty to talk about in the world, and plenty has changed really in the last month. So one, we want to talk about our mid-year outlook and review inflation, what's happening in Federal Reserve policy, which we've seen some real movements there in recent months, and household spending as well. On the market side, of course, equity markets. Plenty happening. Corporate earnings. We have an earnings season coming up. Want to make sure we discuss what expectations are there. Valuations, which are still fairly rich, but maybe not as rich as they were recently. And of course, fixed income as well. So let's jump right into the economy, Blake.

[SPEAKER_C] Yeah, well, somehow we're halfway through the year and it's been a pretty exciting first half of the year. Some of the things that stick out to me, the Hurricanes won the Stanley Cup.

[SPEAKER_B] Absolutely.

[SPEAKER_C] We sent people back to the moon and back.

[SPEAKER_B] Near the moon.

[SPEAKER_C] Near the moon. And a lot went on in the world and in the economy and the markets. The biggest thing, of course, was the massive conflict in the Middle East and the effect that that had on energy prices. 20% of the world's oil flows through the Strait of Hormuz. That was disrupted almost overnight. But look at what happened in the first half of the year in the top panel of this exhibit here. The economy, the outlook for 2026 wasn't changed as much as one might have thought, given what we saw in the middle of the first half of this year. Look at GDP growth. In the beginning of the year, professional forecasters penciled in 2.0% growth rate for 2026. Now, after everything that's happened, shocks, massive AI spending, those things have balanced out And now we're looking at 2.1%, very little changed. Same thing with the unemployment rate. Even though there was talk in March and April, even into May, about a global recession coming from this energy price shock, the unemployment rate penciled in at 4.5% for the end of this year on January 1st. Now we're looking at 4.4%. Same thing with monthly job growth, high 60s, now low 60s. Very, very similar. So the takeaway is despite a pretty big surprise for the first half...

Market Update | June 2026

Transcript

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Market Update | June 2026

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.