2026 Asset Allocation New Paradigm: Strategic Layout in the Post-Rate Hike Era

The shift in the Federal Reserve's monetary policy will be a key variable influencing the U.S. stock market in 2026. During the process of interest rate normalization, investors need to establish a new asset allocation framework to adapt to the changing market environment.

Analysis of Interest Rate Environment Impact:

It is expected that the federal funds rate will fall to the range of 3.5%-3.75% in 2026, still higher than pre-pandemic levels. This "higher but more stable" interest rate environment will change the relative attractiveness of various asset classes. The increase in bond yields brings fixed income products back into the investors' view, and the valuation system in the stock market will also need to be adjusted accordingly.

Sector Rotation Opportunities:

Interest-sensitive sectors such as real estate and utilities will benefit from declining financing costs. The financial sector may face pressure in the early stages of declining interest rates, but wealth management, investment banking, and other businesses will improve with increased market activity. The valuation pressure on growth sectors will ease, but distinguishing between genuine growth and concept speculation is necessary.

Diversification Strategy:

It is recommended to adopt a "core-satellite" allocation strategy, with core positions in high-quality blue-chip stocks, while satellite positions focus on themes of technological innovation and industrial upgrading. At the same time, increase the proportion of alternative asset allocations, including infrastructure, private equity, and other asset classes with lower correlation to traditional stocks and bonds.