Written by Asi de Silva, CFA | January 14, 2026
Source: Headlines from WSJ & Bloomberg. Image generate via a LLM
There’s been a deluge of headlines from the current administration that would in years past have spooked markets. We are no longer reacting to the constant stream of threats, demand and executive orders.
The market is quickly re-learning how to navigate governance by Executive Order as we have seen the spotty implementation since “Liberation Day” in April 2025.
The Short Term
Passive flows & momentum will rule. With 64% of Vanguard 401(k) contributions flowing into Target-Date Funds, passive inertia is a powerful shield against sustained volatility.
The Long Term
Risk could be structural. If "policy by proclamation" becomes the norm, will global allocators continue to pay a premium for U.S. equities?
Today the target is credit card interest rates. Tomorrow? It could be big tech or chips.
The Reality
We’re heading into the 2026 mid-terms. Expect more noise. But remember: creating a headline is easy, but implementation is where the real work (and market impact) happens.
We should also expect more push back from Congress if President Trump’s approval rating declines further and as the threat of primary challenges falls as the election draws near.
The view here is that the risks to markets will come from a less discussed source: Could it be Japanese rates, a “failed US Treasury auction or an important bankruptcy.
What does this mean for you?
When we discuss financial plans and portfolio construction, we also try to anticipate the less know risks because our goal is to customize a portfolio that reduces risks for your unique risk tolerance and cashflow & retirement needs.
Disclaimer:
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