Mitchell Feierstein Warns of 2026 Stock Market Volatility Amid Fed Rate Cuts

Hedge fund manager and investor Mitchell Feierstein stated that Americans should prepare for a volatile stock market in 2026, even as interest rates begin to decline and certain economic conditions improve under President Donald Trump’s policies.

Feierstein noted that the Federal Reserve is expected to implement two to three interest rate cuts during 2026. “I think next year we’re going to see two to three interest rate cuts, at least,” he said.

However, Feierstein emphasized that markets will experience significant volatility, particularly in the first quarter of the year.

The investor criticized the Federal Reserve’s current dysfunction, tracing its roots to decades of policy drift. “The entire Federal Reserve system is broken,” Feierstein remarked, arguing that the central bank has deviated from its dual mandate of price stability and full employment.

Feierstein highlighted recent market trends as evidence that many economists were mistaken about economic conditions. He pointed out that commodities have outperformed equities over the past year, with gold increasing by 65% and silver rising 140%, while major stock indexes showed comparatively modest gains.

“The Fed has kept interest rates too high,” he added, labeling the central bank’s track record as “40 years of policy mistakes.”

Looking ahead to 2026, Feierstein identified employment trends as a key challenge. He noted inflated job numbers during the Biden administration and wages that lagged behind inflation. “We had cumulative inflation of 27% during the Biden administration, and wages were nowhere near that,” he stated, adding that inflation outpaced earnings “by multiples.”

Despite acknowledging signs of economic improvement such as declining inflation and stronger growth, Feierstein cautioned that recovery will take time. “Nothing’s going to turn around on a dime,” he said.

Feierstein urged Americans to monitor the 10-year Treasury yield closely, which he indicated should decrease as rates are cut, thereby lowering borrowing costs for mortgages, credit cards, and business loans.

“President Trump is a businessman,” Feierstein emphasized. “He’s got policies in place that we’ve got to stick with.”

Feierstein concluded: “That’s the way forward for 2026. But the markets will have volatility.”