As 2026 kicks off, Markets Policy Partners’ John Fagan and Brendan Walsh joined CAPIS for the first Monthly Research Briefing of the year. With midterm elections looming, the conversation explored how macroeconomic policy, legal battles and global trade tensions are shaping markets—and what investors should watch for in the months ahead.
Below is a timestamped recap of the conversation.
00:00: Introductions – Ed O’Dowd opens the call, welcoming clients and introducing John Fagan and Brendan Walsh from Markets Policy Partners.
01:30: U.S. Macroeconomic Backdrop – Fagan explains that 2026 will be shaped by the Trump administration’s push to “run the economy hot” ahead of midterms. Key stimulus includes tax refunds via the Big, Beautiful Bill though elevated uncertainty—especially among small businesses—may dull fiscal impact. Labor market data shows a “no hiring, no firing” dynamic, with healthcare and hospitality as bright spots.
05:50: Fed Independence – Pressure to force rate cuts has created friction between the Trump administration and the Federal Reserve. Walsh and Fagan explain how the Senate (via Thom Tillis) is blocking new Fed nominations until the investigation into Lisa Cook concludes—possibly leading Chair Powell to stay on as a voting member. Despite political noise, the Fed is likely to remain independent, with futures pricing in only ~50bps of cuts.
14:06: Tariffs & IEPA Case – Attention turns to the Emergency Economic Powers Act (IEPA), the legal basis for many Trump-era tariffs. A ruling against the administration could require the Treasury to refund ~$133 billion in tariff revenue—an accidental, backdoor stimulus. While politically framed as a loss, Walsh and Fagan argue this could boost the economy and even help the administration into the midterms. They anticipate a muddy, nuanced ruling that limits authority without fully dismantling tariff tools. Other trade powers remain available post-ruling.
20:14: Global Strategy and Energy Markets – Fagan and Walsh assess the geopolitical landscape through the lens of oil prices and election-year strategy. In Venezuela, efforts to increase supply could help lower oil prices, but structural and political risks limit upside.
Any major strike in Iran could destabilize the Strait of Hormuz and send prices soaring, making military action unlikely. The Venezuela maneuver may also aim to isolate Cuba geopolitically. Rubio’s influence and symbolic politics could make it a focus in 2026.
24:30: Credit Card Caps and Crypto Confusion – The administration is pushing ideas like a 10% credit card interest cap, Fannie/Freddie buybacks, and restrictions on private equity home purchases. Most proposals lack legislative teeth. The Credit Card Competition Act could benefit Capital One but has stalled. Even the once-likely crypto bill is now facing resistance from Coinbase and others, leaving the policy pipeline in flux.
28:26: Q&A Segment – Tariffs, the National Debt and A Potential Government Shutdown?
An audience question asks why tariffs are no longer discussed as a way to reduce the national debt. Fagan explains that while the rhetoric has shifted, Treasury investors still see tariff revenue as a quiet fiscal offset. A ruling requiring refunds could spook bond markets—despite the political upside. Walsh and Fagan estimate a meaningful (but <50%) chance of a partial government shutdown. A piecemeal funding approach is unfolding, and Democrats may use pressure points like FAA/TSA to make political statements. However, shutdowns carry risks for both parties—and may be avoided to limit public backlash.
35:21: Final Remarks and February Preview – Ed O’Dowd thanks the panel and reminds participants to reach out to CAPIS or MPP directly for deeper insights. The next Monthly Research Briefing will take place on Thursday, February 19 and feature Katie Stockton from Fairlead Strategies with a technical analysis outlook.