Live From Future Proof: AI's Regulatory Divide 9/15/26

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Scott Wapner (1:02)

All right, Carl, thank you very much. Welcome to the Halftime Report. I'm Scott Wapner. We're live in, as Carl said, Huntington Beach, California for the Future Proof Conference, the fifth annual event drawing more than 5,000 financial advisors and wealth management professionals. We'll have a lot more on all of that in just a bit. Clearly though, the markets are front and center today with Fed decision looming and the AI trade being hotly debated. Joining me here, our hosts, Josh Brown, Stephanie Link and Shannon Sikosha, are by my side as well. Let's take you to the markets. You know the story. I'm sure by now we are red across the board. Bond yields, though, they remain very much the story, especially the 10-year note yield above 5%.

It is the highest level since 2007 That seems to be as much of a driver as anything. Crude oil, yes, we are watching that too, because it's up. Diesel is surging. And Josh, I'll get your thoughts first. We'll talk about future proof in just a little bit, but that's a pretty decent market backdrop to start on.

Josh Brown (2:04)

Yeah, I think that the bond story is tied in with the oil story, and those are really competing for attention right now. But they're all of a piece, because in the end, this is a global phenomenon with yields rising. And just out of my notes here, you look at the UK, the gilt is back above 5% as well, and that's a high since 2008

In France, the same story on their 10-year, 2008 high, the German Bund, 2011 high. Japan, it's a three-decade high. So anyone that's pointing out, well, it's the deficit, or it's the budget, or whatever the case may be, that's not actually true. It's a global phenomenon. The other thing that's happening is inflation expectations are heading higher, and that ties back into the oil story. WTI, back above 100, it is unavoidable.

There's no way you can look at the market through any prism other than people are getting concerned about energy prices, not that they're going to ramp to 130, but is there any relief in sight? And that is resetting expectations. And so what you have here basically is a 10-year that's been rising all summer.

It snuck up on people because they weren't paying attention, but it's been happening for a long time. And it is not an emergency. In 2022, we had a 255 basis point move in the 10-year. This year, not quite the same story. It's only about 79 basis points, not some sort of overnight jarring thing, but again, it is attracting people's attention, and it's important to understand this is now the driver.

Scott Wapner (3:41)

A little more than 24 hours until we get the Fed decision. Are you sort of resigned to the fact now and preparing for the fact that they're gonna hike rates?

Stephanie Link (3:50)

Yeah, I mean, it changed my mind after last week. The numbers were just really high. It was touch and go for a while there, but a core PPI, Scott, a 4.6, a core CPI of 2.4 is just too high, and the Fed has to have credibility if they're gonna get that number, those numbers down, it's closer to 2%.

I don't think, though, it's a foregone conclusion that's gonna go in December. I think we're gonna wait and see. We're gonna see about the data that comes out. We'll see about inflation. We'll see about the war for sure.

But I think it's going to be kind of a dovish hike, if you will, tomorrow. I think Warsh will come out and say, it shows exactly that. This is not an aggressive campaign. All of a sudden, that we're gonna see massive hikes for the next several quarters or several months. And I think the economy can handle it. That's the most important thing. The economy can handle it. Whether the Atlanta Fed is at four or three, it's above trend. The consumer, we're gonna talk about the banks in a little bit, but there have been, the Barclays Bank Conference is this week, and every one of the banks are talking about how the consumer is in fine shape and credit quality is very, very tame. So I think we can handle it. I think earnings will stay elevated as well. Not 50% like we just saw, but I think something like 20% for this year, maybe even into next year. And I think the market's gonna get over this whole hiking thing.