Tailwinds in Focus: Why We’re Still Constructive on the U.S. Economy in 2026
Confidence dAt Riggs, we don’t try to predict every twist in the market. We focus on what the data is telling us, where the long‑term opportunities are emerging, and how to align those opportunities with your family’s plans. Right now, several meaningful tailwinds are working in favor of the U.S. economy—and we have positioned portfolios to participate in them while respecting the risks.
Rates, Inflation, and Housing: A Friendlier Backdrop
As Bob Graham shares in the accompanying video, the yield on the two‑year U.S. Treasury has fallen to its lowest level in roughly three years. Historically, that has been the bond market’s way of telling us the Federal Reserve is likely to move from raising rates to gradually cutting them. Across the curve, interest rates have started to drift lower. Mortgage rates that had been stuck near 7% are working their way closer to the 5% range, which is a much more livable number for households and business owners.
Housing is a big part of that story. Existing home prices are up only modestly over the past year, new‑home prices are being discounted in many markets, and rent growth has cooled. Because shelter accounts for roughly a third of the Consumer Price Index, calmer housing costs make it much harder for inflation to flare up again and give the Fed more room to ease policy without immediately reigniting price pressures.
For our clients, that combination—lower borrowing costs and a more rational housing market—creates a better environment for major life decisions, from moving or downsizing to expanding a business or refinancing.
What Fed Rate Cuts Typically Mean
Rate cuts do not mean the same thing in every environment. When the Fed cuts rates into a true crisis, markets often struggle at first before recovering as conditions stabilize. In a more normal slowdown—what we would call an economic “breather”—lower rates tend to act as a cushion. They reduce financing costs, help credit markets function more smoothly, and increase the value of future corporate earnings, all of which have historically supported both stocks and real assets over time.
Our read is that today looks far more like a breather than a 2008‑style event. We expect volatility. We do not expect perfection. But we do believe patient, diversified investors can be well‑rewarded in this environment. That belief guides how we are positioning your capital.
The AI Build‑Out: From Buzzword to Backbone
Artificial intelligence is no longer just a headline—it is a full‑scale build‑out. Recent earnings reports from major technology companies point to hundreds of billions of dollars of planned spending to create the infrastructure AI requires: advanced chips, high‑speed networking, data centers, and the cloud platforms that tie it all together. Some management teams now talk openly about AI‑related business investment reaching into the trillions of dollars over the coming decade.
At Riggs, we view AI not simply as a “tech trade,” but as a new layer of the economy. It is driving demand for:
The hardware and software that power AI and cloud computing.
The physical build‑out of data centers and communications networks.
The electricity, transmission lines, and backup systems needed to keep those facilities running.
The metals and other raw materials that go into all of the above.
This is exactly the kind of long‑duration, real‑world trend we look for: rooted in data, backed by real spending, and broad enough to touch multiple parts of the economy.
Where We See Opportunity—and How Portfolios Reflect It
Our role is to translate these big-picture tailwinds into thoughtful, diversified portfolios. When we look across client accounts today, several themes stand out:
Real assets and natural resources. We maintain meaningful exposure to companies in energy, metals, and mining—including traditional energy, natural gas, uranium, and key industrial metals such as copper and aluminum. These positions align with our view of a structural bull market in resources driven by under‑investment, energy transition, and re‑shoring.
Infrastructure, industrials, and defense. A substantial sleeve of portfolios is dedicated to the “real economy” build‑out: U.S. infrastructure development, construction and engineering firms, industrial manufacturers, and aerospace and defense. These businesses are direct beneficiaries of public and private investment in roads, power, manufacturing capacity, and security.
Technology and the data‑center ecosystem. We own not just headline AI names, but also the broader technology ecosystem that makes AI possible: semiconductors, networking hardware, cloud platforms, and select software tied to data and security. Together, these positions reflect our conviction that the AI build‑out will be a multi‑year, not single‑year, story.
Power generation and utilities. As data centers and electric vehicles increase electricity demand, we see opportunity in utilities and independent power producers positioned to supply that growth. A dedicated allocation to these companies gives portfolios exposure to what we view as a rare growth phase in a historically “slow and steady” sector.
Financials. With the Fed shifting from aggressive rate hikes toward gradual cuts, we see value in a mix of large, diversified financial institutions, regional banks, and payment networks. These holdings are designed to benefit from a more normal lending environment, improved credit conditions, and a healthier backdrop for business activity.
Healthcare and biotech. We maintain targeted exposure to healthcare and biotechnology as a steady, long‑term growth engine supported by demographics and innovation, and as a counterbalance to more cyclical areas of the portfolio.
International and emerging markets. Finally, we hold a dedicated allocation to international and emerging‑market stocks, with an emphasis on countries and regions tied to commodities, manufacturing, and digital adoption. This reflects our belief that opportunity is global—and that diversification across geographies strengthens resilience over time.
Layered on top of these themes is a deliberate cash and Treasury position, which gives us flexibility to act when markets present better entry points and helps manage overall volatility.
What This Means for You
The work we do is defined by balance—between ambition and caution, protection and progress. We are not chasing every headline. We are selectively leaning into the areas where we believe the odds are in your favor, supported by data, history, and our independent proprietary research.
You do not need to track every statistic or earnings call. That’s our job. Your job is to stay focused on the life you are building—your business, your family, your legacy—knowing that there is a team with deep investment experience treating your capital with the same care and discipline we apply to our own.
If you would like to discuss how these themes apply to your specific plan or how to put new cash to work thoughtfully in this environment, we invite you to reach out to your Riggs team member. We’re here to be your sounding board, your risk manager, and your partner as you navigate what comes next.
One Final Note
As we prepared to publish this Riggs Report, news broke that the United States had carried out strikes in Iran. Events like this are unsettling, and it is natural to wonder what they might mean for your portfolio.
Our investment process is built with this kind of environment in mind. We assume periods of heightened geopolitical tension will occur, which is one reason we hold core positions in assets such as gold and other real assets, and why we emphasize durable balance sheets and resilient cash flows in the companies we own. These are deliberate choices meant to help portfolios weather uncertainty, not after‑the‑fact reactions.
History also offers some perspective. The chart below shows the S&P 500 over multiple decades alongside major crisis events. While markets often experience sharp, uncomfortable swings as news breaks and headlines proliferate, they have repeatedly regained their footing and refocused on the underlying business cycle and economic fundamentals once more information becomes known.
Our approach in moments like this is straightforward:
Watch the risk signals closely—credit spreads, liquidity, market internals—rather than trading headlines.
Distinguish between short‑term volatility and a true change in the economic or financial backdrop.
Take action only when the weight of the evidence says the risk profile has meaningfully shifted.
Coming into 2026, we already expected more volatility and structured portfolios accordingly. If conditions deteriorate in a way that changes the underlying risk picture, we are prepared to adjust our positioning and, where appropriate, take advantage of dislocations. If the shock proves temporary, the discipline of staying invested in a thoughtfully diversified portfolio is often the best course of action.
Most importantly, you are not expected to navigate this alone. If the recent news has raised questions or concerns about your plan, please reach out to your Riggs team member. We are monitoring developments in real time and will continue to manage your capital with a focus on both protection and long‑term opportunity. oesn’t always arrive with a bold entrance. Sometimes, it builds quietly, step by step, as we show up for ourselves day after day. It grows when we choose to try, even when we’re unsure of the outcome. Every time you take action despite self-doubt, you reinforce the belief that you’re capable. Confidence isn’t about having all the answers — it’s about trusting that you can figure it out along the way.
The key to making things happen isn’t waiting for the perfect moment; it’s starting with what you have, where you are. Big goals can feel overwhelming when viewed all at once, but momentum builds through small, consistent action. Whether you’re working toward a personal milestone or a professional dream, progress comes from showing up — not perfectly, but persistently. Action creates clarity, and over time, those steps forward add up to something real.
You don’t need to be fearless to reach your goals, you just need to be willing. Willing to try, willing to learn, and willing to believe that you’re capable of more than you know. The road may not always be smooth, but growth rarely is. What matters most is that you keep going, keep learning, and keep believing in the version of yourself you’re becoming.