In this Episode of the Secure Your Retirement Podcast, Radon and Murs discuss this quarter’s market and economic update with Tom Siomades, from the Federal Reserve’s latest rate increase to the oil prices that have kept inflation elevated for about seven months. Tom explains why a quarter-point hike won’t make a dent in energy-driven inflation, what the Iran conflict means for shipping and fuel costs, and why he sees the rest of the economy in better shape than the headlines suggest.

Listen in to learn about how interest rates, inflation, and oil prices affect retirement investing, why AI stocks are still helping lead the stock market while small caps keep pace, and why fixed income has become a meaningful part of retirement portfolios again. Tom closes with his market outlook for the end of 2026, and Radon connects it to what matters most for your retirement income planning and your peace of mind in retirement.

In this episode, find out:

• Why Tom sees the Fed’s 25 basis point rate hike as more of a signal than a solution
• How elevated oil prices get built into the cost of everyday goods, and why those costs are slow to come back out
• What the broader economy looks like when you set the rate hike and the conflict aside
• How AI stocks, small caps, and higher yields on fixed income are shaping the stock market this year
• Tom’s year-end market call, and why planning for a down year belongs in every retirement plan

Tweetable quotes

“You go to the gas station and they seem to raise the price of gas literally by the minute, and then it takes them weeks and weeks and weeks to lower it.” (Tom Siomades)

“Fixed income is actually meaningful again for people’s portfolios.” (Tom Siomades)

Resources:

If you are in or nearing retirement and you want to gain clarity on what questions you should be asking, learn what the biggest retirement myths are, and identify what you can do to achieve peace of mind for your retirement, get started today by requesting our complimentary phone conversation with Secure Your Retirement!

Here’s the full transcript:

Well, hey, Tom, thank you very much for coming on. I know that it’s always exciting for us to have you back on the show and to really break down some of the things from the big picture, not the everyday stuff. And we’ve got a lot to talk about, I think, right now, a lot of things going on in the economy, a lot of things happening with… I guess the world. And so, first of all, just thank you very much coming back on today. 

Oh, hey, thanks for having me. Always a pleasure to be on with you guys. I love doing these things. It’s, um, you know, sometimes you’re right, you just have to, like, talk it out, and that’s kind of what we’re doing now instead of just laying around and, you know, kind of being, you know, this close to it and faith kind of, you know, reading every blade of grass. Sometimes you got to stand up and look back. So I think these, these are just as helpful for me, um, as you guys, you know, as it is for you guys, probably. 

Good. Hey, well, let’s jump into the, you know, the big topic. I mean, we’re recording this with you pretty quickly after we got a rate increase. And so I think just talking about, you know, I think at a point in time, we were kind of like, oh, man, inflation seems to be under control. It doesn’t seem like we’re going to have a problem except for gas. And, you know, that’s still an issue because of the war. Your perception of what you feel out of this whole scenario from what the Fed did, as well as kind of what you see going on in the world and how that’s going to affect us a little bit around that inflation issue. 

Yeah, I think this is multilayered, right? Because at the end of the day, you think 25 basis points or a quarter of a percent isn’t really going to make a hill of beans difference, right, to things at this point. But it’s just the overall change in the tenor from the Fed, right? Because we were expecting rate cuts this year. That didn’t materialize. Obviously, a lot of this inflation or elevated inflation is still with us because of the rise in oil. But what was supposed to take four weeks is now going on seven months. And oil has been elevated for that entire time, as has been gas and diesel. We’ve seen that, right? And that’s beginning to bleed into pricing of everything. 

So even if the Iran thing gets resolved tomorrow, it’s going to be hard to get all of those costs that have been embedded into a lot of products because of higher fuel prices to come back out again. You know how it is, right? You go to the gas station, and they seem to raise the price of gas literally by the minute, and then it takes them weeks and weeks and weeks to lower it, right? So the economy is in that same kind of place. 

The challenge I have is that a quarter basis point is not anything that’s going to put a dent into energy-driven inflation. I mean, if gas is going at $4 and diesel is going at $6, raising by a quarter point isn’t going to matter, but it’s signaling that they are concerned that this is going to be a more permanent or more durable state of affairs. 

Okay, yeah. Yeah, so then you’re, I mean, how much higher do you think it could go? Where should it go? Because that’s a scary thought for a lot of people, too, of how that could impact the economy. And businesses are kind of in this place of thriving economy strong. But where do you think it needs to go? 

The price of fuel? 

I’m sorry, the interest rates in general. 

Oh, interest rates in general. Well, listen, if you want to break the back of inflation, it has to move several points at this point, right? And I don’t think anybody’s willing to do that because they keep holding out hope that energy is going to come down. But, you know, if you just look at what the predictions are, they’re saying we’re going to get another upwards of another, you know, total of a point, you know, through however many rate hikes they’re going to have by June. 

Okay. Now, do I think they need to be there? I don’t because I think, you know, in reality, if you literally… stop the war tomorrow, like we talked about, prices start coming down. There’s really no need to raise rates anymore. But it’s like, I think the Fed, they want to feel like they’re relevant, right? And they want to feel like they have a hand in the game. But I think this is kind of one of those, you know, they want to play like a nickel game, and this is like, you know, a dollar-a-bet kind of game right now. 

Um, you know, if, if they raise rates, like I said, to, you know, another couple of percentage points, that’s going to kill the economy. And I don’t think they’re willing to do that because the economy is kind of limping along. And every time you start adding higher rates to it, it’s going to slow economic growth. 

So I think they’re unwilling to do that. But they need to show that and acknowledge that people are saying, hey, listen, inflation is a lot higher than what you target. Okay, so what are you going to do about it? Well, we’ll raise rates. But 25 is kind of, in my opinion, a meaningless amount. Two would be more significant, but then that would send a signal that the economy would literally collapse in a recession, which nobody wants to see. You know what I mean? 

So it’s kind of like, I don’t know, it’s kind of like the guy who wants to play the game, but he’s on the bench and he keeps talking from the bench. It’s like trying to impact the game. It’s like, you’re not getting in the game. And that’s kind of what I feel like the Fed is kind of like… isolated itself, right? And that’s a challenge right now for them to prove relevance again. 

Yeah, which I think is a nice segue, Tom, into the Iran war, which has really caused a lot of this issue of energy and costs and inflation leading to interest rates going up. So can you just kind of catch people up to speed on where things stand and on what was supposed to be a very short-term, uh, type of event, which is now much longer term? And now we’ve got more than fuel crisis is coming our way. We’ve got, you know, the actual—I was listening to a podcast today about, uh, the cost of bolts for the missiles and, and that our stockpiles are running low. And, like, what’s your—so first, give some background and then your interpretation on everything going forward. 

Yeah, so these guys, you know, we were supposed to blow up their Navy and blow up their Air Force, and they were supposed to come running to the table, and they were going to give us everything we wanted. You know, listen, there’s an old saying in the military, and that’s, you know, the enemy gets a vote too, right? And, you know, the Iranians chose not to vote the way we wanted them to, right? 

And so, you know, unless we’re willing to commit… on the ground, it literally is, for these guys, it’s existential. They can’t just say, oh, well, you know, hey, shucks, we lost. We lost this time. We’ll, you know, go back and pick up the pieces. They can’t. They can’t show any kind of weakness to their people because their people will turn on them and eat them alive, right? So they have to dig in because they—there is no alternative for these guys, right? 

We’re unwilling to do the hard work of going in there and rooting these guys out and regime change, which is a dirty word for a lot of people. But that’s really what needs to happen if we want this thing to resolve. So what are we left with? It’s like we had that memorandum of understanding. They violated it, or we said they violated it. I don’t know who you believe anymore. We seem to have like a half a dozen deals that came and went. 

More recently, the Iranian guy was at the UN, and he said, you know, hey, here’s a list of demands for this thing to stop. You know, Trump said, no, I don’t, you know, I’m not signing up for that. You know, it would be really simple. All they’ve got to do is just say, listen, we’re not going to build a bomb, which they claim they’re saying they’re not going to, and we’ll open us up to be inspected. And they’re unwilling to do that. 

And so, you know, so long as that goes on, we have this mess where we literally control the Strait of Hormuz, but you’re… hostage to a guy on the back of a motorcycle with an RPG that can literally show up anywhere on the coast and take a shot at a ship. So if I’m insuring ships, if I’m a company that’s transporting oil, I’m not willing to take those kind of risks. 

And so what that does is, even though, you know, we’re hearing from the administration that record amounts of oil are coming through the strait, blah, blah, blah, blah, blah, you know, it doesn’t matter. The market doesn’t believe any of that stuff. 

And then when you couple the fact that, you know, you have these prolonged period of inflation and rates are higher. And then you also—the other thing we didn’t really talk about, maybe we will in a little bit—but, you know, we got $40 trillion in debt. So those things conspiring out there, these people are saying, I don’t want to commit money for 30 years in the bond market. I don’t want to commit money for longer periods of time. Or if I do, I want a significant rate of return for it. That’s why interest rates have gone up. 

And so when you have all of these things sort of boiling around, and there’s really no clear-cut solution outside of the fact that you’re going to have to put somebody on the ground, is going to have to go find… the IRGC and whoever else is running things in Iran and either send them to jail or get them expelled or whatever, make them run away. That ain’t going to happen. 

So I don’t know whether they’re just trying to wait Trump out, but that’s going to be a long two years if that’s the case. And/or they’re trying to see what happens with the midterms. Don’t know. But I don’t really see them just rolling over and saying we’re good to the point of where the rest of the world is going to say, we’re comfortable with the strait being in the condition it’s in right now, and we’re willing to normalize things. So that’s kind of where we are. 

I don’t know who had the great idea that four weeks was going to solve this thing. Again, it would be one thing if it was an election and the guys that lost were good sports about it and went away and started working on the next election cycle. But these are maniacal, ideological people. They’re not going to go anywhere. I mean, it’s like it doesn’t mean—I don’t know. I don’t know who is misreading the room at that point. 

Yeah. Yeah. It’s one of those things where it’s just very difficult for, I think, to imagine a way out, the right way out, I think, for either side of this particular thing. And I know we can probably just keep talking and talking about these particular situations. But I thought I just want to know if we—because those are the two big topics, inflation, interest rates, and the war. But let’s just… take a step back and say, if we didn’t look at those things and we could just put those on the side, put those in a different category, how would you describe the rest of the economy going on right now in the United States? 

I mean, if we just said, hey, you know what, let’s pretend we didn’t have to deal with this little scenario with the interest rates, and it might still bleed in a little bit. And then maybe this war thing was taken care of. How do you feel that the overall strength of the economy is right now? 

So I think things are pretty strong. At the end of the day, people are still spending. People are still traveling. People are still going out. They’re not really cutting back. You’re not seeing layoffs. Earnings have been really—this past round of earnings was phenomenal, right? So the market is within percentage points of all-time highs. 

So you look at all those things, X this other stuff, right? Everything seems to be humming along. Now, you may quibble and say, well, we’re only at 1.5% GDP, but I think if—down and this war thing is resolved, we could easily see 2.5%, 3% GDP growth. 

But, you know, the challenge is, look, you guys know as well as anybody, bad news sells, right? So people are going to complain regardless, right? People are complaining about prices all the time. People go, this is too expensive, that’s too expensive. When don’t people complain about that stuff, right? 

But, you know, anecdotally, you’re seeing it, right? We had the busiest travel season. If the economy is stressed, people don’t travel. That’s discretionary. Going out to eat dinner, buying things. People are spending a lot of money. So, yeah, they’re grumbling, but I’d argue, hey, look, I have a job and I grumble about stuff all the time anyway. 

But I think the economy, by and large, X those things that you described because those are panicky things, right? And I mean, it’s literally like… every time you drive by a gas station and you see $4 gas, it’s like you’re getting, in essence, the middle finger in the economy, right? You’re reminded of it. Then it pisses people off, right? 

But at the end of the day, you’re still buying that plane ticket, or you’re still taking that trip, or you’re still going to stay at that hotel, or you’re still going out on Friday night. And that’s the conundrum, right? You get people involved, and people are going to tell you how they feel, but they’re not always necessarily accurate in what you’re seeing around you. 

So let’s talk then maybe a little bit about the stock market in general. So the stock market this year, at the time of this recording, it’s up double digits or so. And there’s been a lot of that, I think, is from the technology side of things, especially with AI and some massive valuations of companies, like your OpenAIs and your Anthropics and a lot of things that are just kind of leading the charge and excitement. 

But also with AI, there’s been a lot of more conversations in the media that it could spin out of control. You’ve got a lot of people from high-level seats in the AI space are saying, we need to get better safeguards in place. So there’s been a lot of money dumped into AI stocks. 

You know, what are your thoughts on, I guess, the overall broad market? Are we seeing broadening, or is it still really AI that’s leading the race? And then also concerns around all the investment in the AI, but people are saying, well, maybe it’s not as good of a thing as we felt it was, or there’s precautions that need to be put in place. 

Yeah, so I would say it’s been an interesting year in the sense that, you know, given all the headwinds that you have, you think the market would be a disaster, right? Things like small cap are actually outpacing the S&P 500 as we speak, right? 

But yeah, AI, it goes in and out, right? There’s the concept that you talked about where people are worried about, like, it’s going to kill humanity in 10 years, or the data centers and all this, or the amount of money they’re spending on stuff. Or the other side of it that comes in and crashes into them is like, okay, well, these guys aren’t going to show a profit for years to come, and they have to borrow money, and look at interest rates, right? 

And yet, at the same time, they sell off, and then people pile back in, right? And it’s like, this is one of those things where it’s almost like it’s transforming the way we’re going to do things. And yeah, I get it. There’s always the potential for evildoers. There’s always a potential for stuff to run amok. 

But, you know, it’s like you have to be optimistic too, right? You have to hope that people aren’t praying for their own self-destruction. So, you know, a lot of times what you hear is a lot of fear-mongering and a lot of… you know, just worst-casing type stuff. 

And then when you start seeing, like, I saw Altman the other day and he was testifying, and they’re saying we need more regulations. Well, yeah, they want more regulations because they don’t want any competition, right? They’ve already, like, cornered the market on all of this AI stuff, and they don’t want to keep other people from coming in and innovating and changing under the guise of, well, we don’t know, like, we’re good people, but those guys are crazy. They’re going to come in here and destroy humanity. 

So, you know, you got to take this stuff with a… of salt. Like anything, it can be used for evil, but at the same time, you hope that human beings are going to be optimistic. That’s the yin and the yang of this stuff, but I don’t think those companies are going away. 

The Nvidias of the world are going to, you know, they’re durable. They’re having good earnings. You know, and you can’t look at the market of, like, what are things going to be like 30 years from now? Because if you look at what the top 10 in the S&P was in 2020 versus where we are today, I think only Microsoft maybe is the only one that’s left in there, right? 

So we can’t look at it that way. But, you know, for the next three months to a year, the market feels pretty solid. And I think the whole AI thing is still going to be here. And it’s going to be part of… you know, the upward movement of the market. 

Now, interest rates make things challenging, right? When you start seeing mortgages at 7%, you start seeing interest rates at higher levels. That gives people an alternative that they may have not had in the past and say, listen, you know what? I may tie my money up at 5% or 6% and deal with a little less drama than this market that goes up and down and up and down. 

That’s an aspect of the market that’s kind of a newer dynamic this year that we haven’t had recently, is you literally have fixed income is actually meaningful again for people’s portfolios. 

Yeah. So, hey, I think as we wrap this up, what we like to do is always challenge you a little bit to see what you’ll say. So if you had to kind of today, sitting here just between friends—obviously this is not something we’re seeing is going to happen—but if you were to say, here’s kind of how, if I had, because we’re recording this kind of like at the beginning of October, if you had to say, hey, here’s how I think 2026 is going to close out, and what would you say your best guess is at this point, how we’re going to play out the rest of the year? 

I think the rest of the year we’ve got maybe another 3% to 4% upside. Obviously, the caveat is, you know, if we have a disastrous October, like, you know, happens every once in a while, God knows what, you know, what the markets can do. 

But right now, things are pretty placid. And I really see more upside to the end of the year than I do potential downside, right? Because if, you know, we’ve got the midterms coming on, right? So, you know, maybe you’re looking at split government down the road, so you’re not going to have anything big coming from Washington. So that’ll take a load off, right? 

And then, you know, the upside is, I don’t know if the Iran thing can get any worse than it already is. So the upside is that maybe there’s something that’s positive that’s created there. And if that goes away, this market is, like I said earlier, is a couple of percentage points away from records. I don’t see it, you know, I don’t see it not popping off of that level, right? 

So the way to look at it from my standpoint is upside versus downside risks. And I don’t—I mean, there’s a lot of things that could, like, trip us up, but I don’t see them—see things getting much worse from where we are right now, to be honest with you. And I actually see more opportunity for us to come out on the other side with a decent pop. 

It’s almost like we’ve got a—the market is kind of like a bit of a spring that’s been compressed a little bit. You can only compress a spring so much, right? And then it won’t compress anymore. But the energy that’s stored in it is, if you let go of it, it’s going to pop. So that’s my optimistic self. 

But again, we’re going on four years now of really good, you know, double-digit returns in the market, right? And you can’t expect that to last when, when markets average, you know, three out of every four years they’re up. There’s, there’s a down year. So, you know, I don’t mean to hedge. 

Okay, I’ll stop. I won’t hedge anymore. All right. Forget it. I’m saying we’re going to be up another four or five percent by the end of the year. 

That’s awesome, Tom. Well, you know, we, we always appreciate you taking some time out of your busy schedule to hop in and just explain some things in a very simple way and get perspective from the big picture as far as, you know, things you’re looking at and what’s going on in the economy. Thanks a lot for your time today, Tom. 

Awesome. Yeah, and hopefully I’ll get down to see you guys one of these days and meet some of your clients live. 

That’d be awesome. Sounds good. Thank you very much.