Ken Fisher on Inflation, Sell America, US National Debt and More - June 2026

Transcript:

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Naj Srinivas
Hello and welcome to the Fisher Investments Market Insights podcast, where we discuss our firm's latest thinking on global capital markets and current events.

I’m Naj Srinivas, Executive Vice President of Corporate Communications here at the firm. Today, we’ll hear from founder, Executive Chairman and Co-Chief Investment Officer of Fisher Investments, Ken Fisher.

In this episode of Market Insights, Ken answers some common listener questions to help you better understand the world of finance and investing.

But before we dive in, I'd like to ask you a favor. Recommend our podcast and rate it wherever you listen. In just a few minutes, you can help make this valuable information available to even more people. Thanks so much for your help, in advance.

With that, let's dig in with this month’s Ken Fisher mailbag. Enjoy.

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Ken Fisher

So every month I get questions sent in to me and I try to answer them quickly, which every month I fail at, because I'm not very good at saying things quickly. I did talk very, very fast, so I have to speak really fast and make mumble jumble out of everything. But in reality, I'm a kind of a plotter when it comes to explaining things.

So this month's first question isn't high inflation and a worsening job market an indicator for a recession? No. The fact is, both of them at the point in time that you see them when you say, a worsening, what we really talk about when you say worsening is looking at recent months and projecting that into the future. And the fact of the matter is, whether it's inflation looking backward or job numbers looking backward, they aren't necessarily at all consistent with the future. Therefore, they're not predictive. But well, if you're asking me a hypothetical question, that might be a little different. But if you put a number on what high inflation means, it's really not high inflation that is a predictor of recession. It's if you had much worsening inflation and then the central banks of the world were to tighten hard to try to fight that, that might cause recession.

But if you think high inflation is the inflation that's going on around the world, now, you're smoking the funny stuff. Because if you look at the inflation now, compared to most of the inflation in the last 50 years, we're actually at levels that are below those levels. You're still reacting to the inflation that occurred in the immediate aftermath of Covid, when central banks did a bunch of stupid stuff, increase the quantity of money drastically, on a global basis, and ushered in depending on where you are in the world, 25 to 35% cumulative inflation in just a few years. But that's the past. That's not where we are now. Where, like in the United States, we're looking at 3% inflation. We went for a long, long, long time with 5% a year inflation, world did just fine. I'm not suggesting where inflation is going. I'm answering the question, the answer, the questions. No, it's not a reflection of a recession.

If investors start to lose confidence in the US being investable due to unpredictable policy making, tariffs, Iran, etc., does that not at some point lead to it actually being different this time? No, not necessarily. But maybe. Let me point out what I just said before, about that stuff about inflation and global and global being what's important more than a single country. The fact of the matter is, if you think about US. US is just part of the world when it comes to the stock market, just part of the world. When it comes to GDP, it's about 25% of GDP globally. We got plenty of crazy in the rest of the world and always have. In some ways, the world has countries becoming more crazy. Countries become the less crazy to a point in time. What happens with the United States in its unpredictability is in the eyes of the beholder to some extent. It is unclear to me that the United States is inherently, in aggregate, less predictable than it used to be. Politicians say a lot of crazy stuff. Politicians may say and do things. They're a little different than they've done before. I'm not sure that really, when it comes to the economy, the United States as a whole, being so unpredictable that it really is the United States as an economy has been pretty darn steady, rolling.

So in May, why not sell and buy back in after the midterm elections bring clarity? Well, first off, let me just say that if you're waiting for clarity, the stock market is a very expensive place to get it because the stock market always moves before you get clarity. Secondarily, there's this age old mumbo jumbo nonsense of selling may go away because there have been a few very extreme periods of May to October that have caused that period to not be very pleasant. But if you actually take the history of May through that September, October time period, that the selling may go away folk talk about, actually, if you look at correctly calculated indexes like the S&P 500 or the Morgan Stanley World, more importantly the world and the S&P 500, but true of both their net positive throughout that time period in history, including those bad months, those bad few times where they got extreme outcomes. Never let a few extreme outcomes in a longer history skew your sense of what's normal and don't ever bet that because a period has below average returns that are positive, that it’ll have necessarily below average returns in the time period that they had. Sell in May, go away, buy back later on. Whether it's midterms or not is wrong, but stocks start rising when the midterm miracle that I've written about many times over decades occurs before the midterms actually hit.

And finally, can you speak to the rising national debt and the risk involved for the country and the investment community? I've written about this for a long, long time. I've spoken about this for a long, long time. The US debt, which is seeming to be gargantuan numbers if you think of the $38 trillion of debt, is actually in ways that are measurable, not problematic. If it was problematic, I am going to guarantee you, dollar to donut, that US long term interest rates would be much higher than they are, because borrowers would demand to be paid mightily for taking the risk of the debt that they would be funding not being paid back. The fact is, you can read in my books and in columns that I've written, all kind of detail. I'm supposed to answer this stuff quickly on these questions, so I can't take you through all that for ten minutes. But the fact of the matter is, we are not at levels that caused developed nations to have problems. Might we at some point in the future? Of course we might. But that's down the road to be considered. And that doesn't mean do with what would happen to the stock market, to the bond market, or to GDP in the period of the next few years?

Thank you for all of these questions. Send in more next month. I'll answer more next month. I always enjoy doing this, even if sometimes my responses and my answers to some of these questions are a little bit bombastic. Keep sending them in. I enjoy doing them. Thank you.

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Naj Srinivas
That was Ken Fisher answering listener questions as part of his monthly mailbag. Thanks to Ken for sharing his insights with us.

If you want to learn more about the topics discussed today, you can visit the episode page of our website, Fisher Investments.com. You'll find a link to that in the show description. While you’re on our website, you can also subscribe to our weekly digest, which rounds up our latest commentary and delivers it right to your inbox every week. And if you have questions about investing or capital markets that we can cover in a future episode of Market Insights, email us at marketinsights@fi.com.

We'd love to hear from you, and we'll answer as many questions as we can in a future episode.

Until then, I'm Naj Srinivas. Thanks for tuning in.

Disclosure:
Investing in securities involves the risk of loss. Past performance is no guarantee of future returns. The content of this podcast represents the opinions and viewpoints of Fisher Investments and should not be regarded as personal investment advice. No assurances are made we will continue to hold these views, which may change at any time based on new information, analysis, or reconsideration. Copyright Fisher Investments.