Plus, an update on inflation and how we approach challenging market environments.
Last evening, I joined my sons at an event to sort and pack food and clothing collected from the community, and to make cards filled with uplifting messages of love and encouragement. We were participating in a national day of service to honor the nearly 3,000 Americans who died 24 years ago in the September 11 terror attacks. Even as we packed bags and wrote cards, adults murmured about the violence of the week—the assassination of conservative political activist Charlie Kirk and another school shooting in Colorado.
It is hard to reconcile the financial market’s oblivion to the challenges of this moment, a sentiment many of you have expressed with anxiety for the future. There is a famous Wall Street adage that says, “Bull markets climb a wall of worry; bear markets slide down a slope of hope.”
Whether it is violence, tariffs, stagflation, recession or geopolitics, or a combination of all the above, markets rarely reward fear-based decision-making. So please know when we recommend sticking with your plan, it is not because we are disregarding real challenges or are cavalier about risks. Rather it is because history shows that investors who abandon their plan have consistently faced lasting underperformance.
It is noteworthy that there have been nine instances when the Federal Reserve has cut rates while the S&P 500 was at or within 1% of an all-time high since 1990. While past performance is not indicative of future results, Fed easing amidst still-solid economic conditions may support valuations and earnings growth in the near term, giving new legs to this rally. The rising market is also underpinned by the reality that innovation is real, durable and powerful, and as AI spending and adoption ramps, professional investors are keeping their eyes on the prize. We recommend you do the same and be reassured by the thoughtful asset allocation and disciplined risk management that imbues our approach to stewarding your wealth through these highs and lows.
The economic data this week did not surprise, a welcome development for investors who want a Fed rate cut next week and were hoping that some gnarly inflation report wouldn’t thwart that course. While inflation has not dampened down to the Fed’s target rate of 2%, the readings on the consumer price index and producer price index were in line with expectations in August.
Consumer price inflation showed 2.9% growth year over year through the end of August, with increases across most spending categories, but especially airline prices. The producer price index rose an annualized 2.6%, which is down from earlier this year.
However, worries are building about accelerating producer inflation. With spending likely to pick up during the holiday season and into 2026, businesses may be forced to begin passing along more of the cost increases—tariff-related and otherwise—previously absorbed into the bottom line.
As we anticipate the results of next week’s Fed meeting and consider what comes after, I am ever mindful on this anniversary of 9/11 that sometimes there are bigger worries and problems to face than the number of basis points interest rates are cut or whether multiple expansion continues. But we also have positive forces at work—striving to overcome violence, hatred and fear. President Harry Truman once said, “America was not built on fear. America was built on courage, on imagination and an unbeatable determination to do the job at hand.” Let’s roll.
RWA remembers and honors the lives lost on 9/11, the heroes who rose, and the resilience of our nation.
Written by a human.