VanEck Says 2026 Will Be Risk-On Quarter Despite Bitcoin Cycle Break

Core Viewpoint - VanEck has declared 2026 a "risk-on" year for investors, highlighting opportunities in artificial intelligence, private credit, and gold despite Bitcoin's deviation from its traditional four-year cycle [1] Economic Outlook - The Q1 2026 outlook from VanEck emphasizes unprecedented visibility into fiscal and monetary policy, contrasting with previous years of economic uncertainty and differing from Goldman Sachs' forecast of 11% global stock returns primarily from equities [2] - Improved clarity in fiscal and monetary policy is attributed to Treasury Secretary Scott Bessent's influence on Federal Reserve policy direction [2] Monetary Policy Insights - Bessent's interview suggests that current interest rates are at "normal levels," indicating that aggressive cuts are not necessary, with market expectations for rate adjustments limited to 25 to 50 basis points through 2026 [3] - Bessent criticized excessive quantitative easing post-COVID, linking it to the ongoing 10% inflation affecting Americans [4] Fiscal Stability and Growth Projections - The US fiscal picture shows significant improvement, with deficits projected to decline to 5.5% of GDP or less in fiscal 2026, contradicting more pessimistic Wall Street forecasts [5] - GDP growth could exceed consensus estimates, with Bessent suggesting analysts are significantly underestimating growth potential, as fourth-quarter 2025 growth reached 4% [6] Market Sentiment and AI Opportunities - Concerns exist regarding the selection of a new Fed chair in May 2026 and potential influence from Donald Trump, but Bessent's groundwork suggests a smooth confirmation process [7] - AI valuations have reset to attractive levels following corrections in late 2025, with companies reliant on debt for data center buildouts experiencing stock price declines exceeding 50% from summer peaks [8]