Three Big Predictions for 2026

Another year gone.

They really do come and go quicker the older you get… I read somewhere that the perception of time speeding up stems from older brains processing fewer new experiences and creating fewer detailed memories, which apparently has the effect of blending time together and, thus, making us feel like years pass more quickly.

Whatever the case, 2025 is leaving us and 2026 is waiting to take its place.

Which means it’s time for me to peer into my broken crystal ball and divine the future.

So, I’ll take a crack at it…

Here are few of my predictions for the new year:

• The Fed Is Lying… to Itself

Maybe lying is too strong. Willfully ignorant is maybe a better way to term it. Or maybe current Fed Chair Jerome Powell is just setting the stage to walk away.

I saw this because at the conclusion of the Fed’s December meeting, Powell announced that the arbiter of interest rates is ready to slow its roll on rate cuts after having announced three quarter-point reductions in the last few months. Next year, the Fed says it expects just a single quarter point cut.

It’s almost like the Fed doesn’t realize that Trump’s hand-picked candidate, Kevin Hassett, is soon to take the reins as Fed chairman.

Trump has campaigned across all of 2025 that the Fed cut rates to 1%. Powell never listened—precisely the tack any good Fed chair should take with any president.

Hassett will likely be much more accommodating.

He has openly called for much lower rates, in line with what Trump wants.

Thus, my prediction: The Fed will cut rates more than once next year… unless that one rate cut is 2.5 percentage points, which would take the Fed Funds rate down to the 1% range.

Thing about yes-men is that they know precisely why the boss elevates them into power positions: They have explicit marching orders on a specific job they’re tasked with accomplishing.

Hassett is yes-man, through and through.

He knows exactly what his boss wants.

So, US interest rates are heading lower in 2026 and by way of more than one interest rate cut. We could see five half-point cuts (Hassett has said numerous times the Fed should cut by 0.5 percentage points). Ultimately, that would drop rates to the 1%-ish range.

Will it happen that way? Can’t say.

But I’m confident interest rates in the US will fall, and that the Fed will cut more than once in that process.

Which means…

• The Dollar Keeps Falling

Currencies move relative to one another, like kids on a seesaw. One goes up, the other goes down by definition.

A big part of the reason for that is interest rate differential. If investors can earn greater interest income holding Currency X instead of Currency Y, then they sell Y to buy X.

Capitalism at its most basic: Mo’ money!

With interest rates on the dollar heading down, investors will seek better returns in currencies including the Aussie dollar, British pound, and others.

Moreover, global investors are increasingly fearful of America’s rapidly mounting debt and the risks inherent in that. And they’re no longer convinced they can trust the economic data that US agencies release, given that Trump fired an agency head for (rightly and accurately) reporting a weakening economy, and the administration has delayed or cancelled other data releases.

Thus, my prediction: The dollar continues grinding lower in 2026.

How much lower is hard to say.

But I’ll go out on a limb and say the greenback fully retraces to its previous lows between 2018 and 2021. That puts the US Dollar Index somewhere between 89 and 90. It’s at 98.50 today, so that implies another 10% drop.

Which means…

• Gold Keeps Rising

Gold had a heck of a dandy 2025, up roughly 65%… and a 30% gain in 2024.

The new year should see the continuation of that trend.

Central banks have been big buyers in recent years because they’re losing faith in the US dollar and a dysfunctional American political system. Global investors, as I noted above, are worried about America’s extreme debt.

And they’re now troubled that Trump has nominated a yes-man to head the Fed, which is seen at the Fed losing its independence and becoming a tool for political objectives. That will not play out well for the dollar, which benefits gold.

As I write this, gold is flirting with an all-time high near $4,400 per ounce. It will go much higher from here. As I’ve taken to writing recently, gold will see $10,000 before it ever again sees $1,000.

Thus, my prediction: Gold cross $5,000 in 2026.

Depending on where Trump goes next with tariffs, where inflation heads after Hassett’s Fed cuts rates to the bone, perceptions of fading Fed independence, and the degree to which global central banks keep buying… gold could even test $6,000 this year.