Bank of America's CEO got this right... Why interest rates will matter in 2026... Greg Diamond's take... Peak oil growth... Why Maduro's takedown is so timely... The U.S. sector that will benefit...
'You shouldn't know they exist, quite frankly'...
That's what Bank of America CEO Brian Moynihan said recently about the Federal Reserve.
Moynihan discussed the central bank in a CBS interview broadcast in the sleepy week between Christmas and New Year's. He said that while the central bank has a big role in "stabilizing the economy," there is "too much fascination with the Fed."
As Moynihan said...
We're a country that's driven by the private sector, by what people do, and in the businesses and the companies, small companies and large companies, medium-sized companies, and entrepreneurs and doctors and lawyers – all these people drive our economy. The idea that we are, like, hanging on the thread by the Fed moving rates 25 basis points, it seems to me we've gotten out of whack.
He approves of the Fed coming to the "rescue" in cases like the financial crisis and the onset of the pandemic. Otherwise, the Bank of America head put it, "You shouldn't know they exist, quite frankly."
We agree.
Imagine if every investor could forget about the Fed, or any government institution for that matter. They could just focus on which people or companies were creating the best value for others. Investing would become pretty straightforward.
And, indeed, it can be if you focus on just that over the long run.
But plenty of people don't do this. They might be investors at Wall Street firms looking to hit quarterly or annual benchmarks... institutional investment committees with varied interests... analysts who just want to be "right"... or individual investors chasing quick gains with leverage...
They're not trying to exclusively build long-term wealth with great companies. They're trying to bet on what the Fed will do to "help" or "hurt" the economy by monkeying with interest rates and policy.
Another Fed official was in the headlines today...
This one is Stephen Miran, coiner of the "Mar-a-Lago Accord" and President Donald Trump's hand-picked choice to be a voting Fed member. Miran said on the Fox Business Network this morning...
I think policy is clearly restrictive and holding the economy back... I think that well over 100 basis points of cuts are going to be justified this year.
Miran's term as a Fed governor ends January 31. His late-2025 appointment to replace Adriana Kugler was meant to last only four months... But his words in context signal what the market is expecting from the central bank this year: falling interest rates.
Current Fed Chair Jerome Powell is all but officially a goner, and his term as chair expires in May. Trump has made no secret of his desire to replace him with a "low-interest person."
Now, even with his term as chair coming to an end, Powell's term as a Fed governor still lasts through January 2028. If Powell stays on, he could prevent Trump's appointees from having a majority on the seven-member board.
Here's another consideration... Everyone assumes that the next Fed chair will bend to Trump's wishes rather than make policy decisions independently from the president.
But Moynihan also cautioned against this in the CBS interview, saying...
The market will punish people if we don't have an independent Fed, and everybody knows that.
Remember that the Fed doesn't control all interest rates...
The Fed sets the federal-funds rate, the overnight lending rate for banks. This rate can influence other interest rates... but it doesn't always.
For instance, the central bank began cutting rates in September 2024. But mortgage rates and long-term Treasury yields rose in response because the market was concerned about inflation.
As 2026 begins, Ten Stock Trader editor and technical analyst Greg Diamond says rates will again be one of the big factors he will be tracking. As he shared with his subscribers yesterday...
The 30-year interest rate was in a strong uptrend from its COVID lows before peaking in 2023. Since then, it has largely gone sideways...
The massive headwind of rising rates in 2022 and early 2023 has softened. On the whole, rates being mostly range bound is good for stocks. But what comes next?
If it weren't for the record-long partial government shutdown in the second half of 2025, we might have the answer already. But as Greg said...
A lot of federal economic data was delayed. And as we see revisions to that data, bond traders might play "catch up" and adjust for this incoming data. What that will look like is anybody's guess. But it's why we're paying attention to rates.
Perhaps the labor market will turn around from here. Perhaps the economy will do better than many expect. Maybe rates will grind higher, but stocks won't react that negatively. That's one scenario to consider.
Another possibility is inflation coming back in a big way. If that happens, rates could move sharply higher into the April/May timeframe (see the solid blue swing line in the chart). Then bonds and stocks could fall as a result.
This data will give us a clue to how real businesses and the economy are performing. We'll keep an eye on these "real" indicators at the same time we watch the Fed's leadership change over.
As regular Digest readers know well, the U.S. labor market in general has been gradually weakening for at least a year. You could even argue that some parts of the economy, like manufacturing, are in recession. Still, last year's third-quarter GDP was reported to show 4.3% growth.
As Greg mentioned, maybe everything will go perfectly. Maybe lower rates will stabilize the labor market without letting inflation get out of control. That would mean a smooth ride in the stock market.
But if that doesn't happen, investors should brace for volatility.
None of this means you should buy stocks hand over fist or flee the market. But the Fed and interest rates will drive many short-term market moves all year long.
More about 'changing the global oil game'...
We wrote to you yesterday about the capture of now-former Venezuelan President Nicolás Maduro. Yesterday brought knee-jerk market winners in the energy sector like Chevron (CVX) – the lone U.S. oil major with a significant presence in the country – and a few oil-infrastructure companies.
Yesterday evening, Stansberry Research senior analyst Brett Eversole explored the story in his latest True Wealth Systems issue. According to Brett, the takedown of Maduro highlights a story he'd already had his eyes on: the need to tap oil reserves in countries outside the U.S., like Venezuela.
As he shared, that's because U.S. oil production growth may have already "peaked"...
The actual peak in America's oil supply has been notoriously hard to predict. Advancements in drilling and extraction have pushed supply further out than the peak-oil crowd thought possible. And the rise of electric vehicles and alternative energy sources has made it last even longer.
That's why I couldn't believe my eyes when I saw this data...
According to the U.S. Energy Information Administration, America's oil production just reached its mathematical limit. Take a look...
U.S. oil production peaked at an estimated 13.9 million barrels in the fourth quarter. And we'll likely never see a higher watermark again...
He's not saying that these estimates imply the U.S. won't keep producing plenty of oil. America will continue to supply more of the world's oil than any other country... and plenty of our own to meet domestic demand.
But, as Brett explained, he believes that an "era of rapid growth is over." For years, America ramped up drilling and fracking for all the easy-to-get oil in the Permian Basin – the oil-heavy region in West Texas and New Mexico where roughly half of America's oil reserves are sourced from. This pace of growth won't continue.
To that point, countries like China, Saudi Arabia, and Argentina are working on recreating America's oil-producing strategies within their own borders. And this can still be good news for some U.S. companies.
In this issue, Brett recommended buying shares of U.S. oil-services companies to play this trend, rather than producers. Some are already doing business in these non-American markets.
Existing True Wealth Systems subscribers and Stansberry Alliance members can read the issue here and find all the details about Brett's portfolio recommendation.
New 52-week highs (as of 1/5/26): ABB (ABBNY), Applied Materials (AMAT), ASML (ASML), BHP (BHP), Century Aluminum (CENX), iShares MSCI Emerging Markets ex China Fund (EMXC), Enel (ENLAY), EnerSys (ENS), Ero Copper (ERO), iShares MSCI Italy Fund (EWI), iShares MSCI Spain Fund (EWP), iShares MSCI South Korea Fund (EWY), Expeditors International of Washington (EXPD), Fanuc (FANUY), Freeport-McMoRan (FCX), SPDR Euro STOXX 50 Fund (FEZ), Comfort Systems USA (FIX), Cambria Foreign Shareholder Yield Fund (FYLD), IQVIA (IQV), iShares U.S. Aerospace & Defense Fund (ITA), JPMorgan Chase (JPM), KraneShares Bosera MSCI China A 50 Connect Index Fund (KBA), L3Harris Technologies (LHX), Mueller Industries (MLI), Merck (MRK), Robo Global Robotics and Automation Index Fund (ROBO), Roku (ROKU), Sprott (SII), State Street SPDR Portfolio S&P 500 Value Fund (SPYV), Thermo Fisher Scientific (TMO), Taiwan Semiconductor Manufacturing (TSM), Vanguard FTSE Europe Fund (VGK), State Street Industrial Select Sector SPDR Fund (XLI), and ExxonMobil (XOM).
We've reopened the mailbag from our holiday break. Today, Jeff Havenstein – a senior analyst for Dr. David "Doc" Eifrig – answers a question that came in stemming from Doc's series of Digest essays on options trading... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"Hello, For this article in the Stansberry Digest, I have a question on the trade that was discussed below:
"If the $37.50 covered calls were sold at $3.17, after you bought the 100 shares of Shell at $40, how was there more than 1.7% profit made when the stock soared and your shares were assigned (called away) at $37.50 per share; ((317 + 3750)/4000 – 1) x 100 = 1.7% as mentioned in the article? The article then mentions after the options were sold in late August for $3.17, and oil went from $68 to $80 a barrel, the covered calls closed in October for maximum profits?
"Am I missing something? Your clarification would be appreciated." – Subscriber Curt C.
Jeff Havenstein comment: Here's how the trade worked out...
On August 27, 2021, we bought shares of Shell (SHEL) at $40 a share. We were paid $3.17 per share for our $37.50 calls.
On October 15, 2021, we sold shares at $37.50 (the shares were called away at the strike price). So we collected $3.17 in cash, minus the $2.50 loss we took on the shares. That's $0.67 in profits per share, and $0.67 divided by the $40 we spent to buy shares is 0.01675 – rounding to the 1.7% gain we published.
We say "maximum profit" because once we've sold a $37.50 call, that's the most profit we can make. We make that same profit whether shares are at $37.50 or at $38.50 or at $98.50. In Retirement Trader, we cap our upside in exchange for getting paid premium up front and taking on less risk than a shareholder.
We were in this trade for 49 days. If we made this same trade every 49 days, we'd make about 13% for the year.
Now, this was a very conservative trade we made by selling an option with a strike price that was far below the price of the stock. For the average trade we make in Retirement Trader, we target annualized gains of 20% or more. But this example should give you a good understanding of how we can safely generate income month after month.
We can make money even if stocks fall.
All the best,
Corey McLaughlin with Nick Koziol
Baltimore, Maryland
January 6, 2026
