Outlook 2026: Geopolitics, policy and your portfolio

Some of the biggest unknowns for investors relate to world events, domestic policy shifts and how they might affect the markets. Watch this video for an understanding of the potential surprises this year.

 

GEOPOLITICS AND GOVERNMENT POLICY are set to have a big hand in the economy and markets in 2026. The evolving relationship between the U.S. and China, continuing negotiations — and a Supreme Court decision — on tariffs, upcoming rate-cutting decisions by the Federal Reserve, and the midterm elections are just a few of the events with the potential to move markets.

“The administration came in wanting to establish their priorities in three areas: taxes, tariffs and deregulation,” says Larry Di Rita, head of Public Policy for Bank of America. While the “One Big Beautiful Bill Act” provided clarity on taxes, he adds, “there’s more work to be done on tariffs and regulation.” Not to mention funding the government. “It would be a mistake to overlook the possibility of another government shutdown come January 31,” when the current stopgap bill expires.

In the video above, Di Rita speaks with Chris Hyzy, Chief Investment Officer for Merrill and Bank of America Private Bank, about all of these issues and more. “Government policy and geopolitical events can shift with little to no warning,” says Hyzy. “It’s important to know what to watch for so that you can begin to prepare for any volatility that might occur.”

For more insights on the markets and economy in 2026, watch the year ahead Outlook webcast,  “Powering up: What could drive the next era of growth?” and read “Outlook 2026: Could the market power into higher gear this year?”

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The opinions expressed are as of 11/18/2025 and are subject to change.

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