Marc Chandler - 2026 Macro Outlook: Currencies, Commodities & the AI Trade
The KE Report Jan 2, 2026
Summary
Dollar index likely bounces toward $99.50 in Q1 2026 on tax-refund-fueled growth before Fed cuts resume and a longer-term bear market reasserts.
Silver is on its way to $100 and gold to $5,000, driven by China's January 1 export curbs and a U.S. critical-minerals designation.
AI valuations look extended and overcapacity risks a shakeout, with robotics and quantum computing as the candidates to lead the next leg.
Politics now drives markets as directly as economics — U.S. midterms, German state elections, and a possible Japanese snap election reshape the 2026 picture.
Marc Chandler's takeaways
- Top takeaway The guest argues 2026 will be another difficult year for the US dollar, framing it as still in a bear market that peaked in September 2022, though he expects a near-term bounce to about $99.50 on the dollar index in January before renewed decline of a magnitude similar to 2025.
- He expects the Fed's first 2026 rate cut to land in the middle-to-latter part of Q2, with the curve steepening as the Fed eases into a labor slowdown while inflation remains above target, and notes the long end is also being weighed by the Dutch-led shift from defined-benefit to defined-contribution pensions reshaping European bond demand.
- On commodities, the guest sees silver heading to at least $100 and gold to $5,000, citing China's January 1, 2026 silver export restrictions and the US adding silver to its critical minerals list in Q4 2025 as fresh catalysts, and argues a multi-decade commodity cycle is still early.
- He frames politics and economics as 'opposite sides of the same coin' and flags 2026 political risks: US midterms, German state elections with the AfD running ahead in eastern states, UK Reform Party gains in May locals, and a possible Japanese snap election before the spring/late-Q2 G7 given the prime minister's post-China-confrontation popularity.
- On AI, the guest is skeptical and draws parallels to the internet bubble, expecting overcapacity and a shakeout across LLM providers; he favors robotics as a 2026-2027 theme of AI being 'embedded' into things rather than further popularized, alongside quantum computing as the next technology frontier.