The writer is chief investment strategist at Charles Schwab
Investors often describe the current environment as “uncertain” but that word may understate what is truly different about this cycle. Uncertainty implies a range of possible outcomes around a stable centre. What defines today’s US backdrop, and likely much of 2026, is something more persistent and at times more disruptive: “instability”.
Instability is not about a single looming risk (including geopolitics) or a binary outcome. It reflects an environment in which the relationships on which investors rely, between inflation and growth, labour and consumption, policy and markets, are constantly shifting. That instability, rather than a clear recessionary or boom-time signal, is a defining feature of the current cycle.