Friendliest Fed Meets Narrowest Rally: 10 Key Views For 2026

11 Dec 2025

by Dhaval Joshi, Chief Strategist

The bull versus bear battlelines are drawn for 2026: The friendliest Fed meets the most concentrated stock market rally ever. This last report of the year goes through the 10 key views for 2026 that emanate from this fascinating setup.

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BCA Research | Counterpoint

A global macro strategy which uniquely synthesizes macroeconomics with psychology, behavioural finance, non-linear systems, complexity, and fractal analysis.

Contents

Executive Summary
Key View 1: Down Years Are Rare
Key View 2: In 2026, The Greater Risk Is Not That A Recession Triggers A Market Crash, But That A Market Crash Triggers A Recession
Key View 3: 2.5 Million Excess American Retirees Are Propping Up US Demand, But Such Demand Is ‘Stock-Market-Sensitive’
Key View 4: The Fed Will Sacrifice 2 Percent Inflation To Avoid A Stock Market Crash
Key View 5: The Narrowness And Fragility of Market Rallies Will Signal Points Of Maximum Vulnerability
Key View 6: Europe Will Experience Low Growth With Low Inflation
Key View 7: Japanese Bond Yields Are Too Low
Key View 8: Chinese Bond Yields Are Too High
Key View 9: Underweight Industrial Commodities
Key View 10: Own A Combination Of Gold, Bitcoin, and Ethereum
Indicators To Watch - Bond Yields
Indicators To Watch - Interest Rates