Jeff Christian, managing partner of CPM Group and a veteran commodities analyst, is arguing that the U.S. economy is showing multiple signs of decline.
Speaking in a February 5 interview with David Lin, Christian singled out the weakening labor market, persistent inflation pressure, and growing political uncertainty as setting the stage for heightened volatility across financial markets in 2026.
The discussion also touched on the fact that declining interest rates typically support equities, but the analyst argued that this cycle is different. Specifically, he reasoned that when rate cuts are driven by slow growth, weak corporate earnings, and layoffs, their effect could ultimately damage stock prices, not lift them.
“Lower stock market would be positive for lower interest rates, would be positive for the stock market, just on a pure valuation basis. But insofar as the interest rates are declining predicated on expectations of weaker economic activity and reduced earnings in some corporations and layoffs, there is a general feeling that we are headed toward recessionary, or at least very low, economic growth,” Christian said.
What’s more, he noted that recent equity strength has been mostly concentrated in a few artificial intelligence (AI) and, interestingly, crypto stocks, both of which he described as increasingly unstable. Accordingly, as confidence in these sectors decreases, investors are bound to become more defensive.
Safe haven assets will flourish
According to Christian, rising economic and political anxieties are pushing individual investors and large institutions alike toward alternative assets, such as industrial and precious metals.
With more than 20% of global financial assets still sitting in cash, the commodities expert said, a great flow of capital is searching for a place “to park” outside traditional stocks and bonds.
“People, institutional investors to individual investors, are all looking for safe havens… Those safe havens are gold, silver, and also industrial metals, platinum, palladium, copper, aluminum, nickel, zinc. They’re all rising as people try to find alternative assets to park their money in because we still have this enormous supply of money with, you know, more than 20% of the financial assets in cash.”
Exchange-traded funds (ETFs) data shows steady institutional buying of gold throughout January. On the other hand, silver investors largely took profits as prices surged. This, Christian explained, implies that silver’s smaller market size makes it far more volatile when large investment funds enter or exit.
Addressing the theory that the metals market is being manipulated, Christian dismissed comparisons to the Hunt Brothers situation in 1980, emphasizing that modern markets are dominated by computer-driven trading (i.e., 90% of futures volume generated by algorithmic signals). As a result, metals often move together as automated systems respond simultaneously to the same price patterns and macro signals.
Economy in 2026 will remain volatile
Likewise, the analyst pointed to rising jobless claims, falling job openings, and slower hiring as evidence that the U.S. labor market has been steadily losing momentum for months.
“Initial jobs claims came out 231,000 versus the expectation, which is 212,000…. The labor market’s weakening job openings came down to 6.5 million, nowhere near the expectation of 7.1 million. So what do these numbers tell you? You have a very weak labor market in the U.S., and it’s been growing increasingly weak over the last several months,” Christian said.
Further, the discussion described the Federal Reserve as effectively “stalemated,” given that it faces persistent inflation even as economic momentum fades. Indeed, producer price inflation remains near 3% on a headline and above that on a core basis, which is well above preferred levels.
At the same time, unemployment is getting higher, and layoffs are increasing, all while smaller companies show low willingness to hire new workers. As a result, Christian warned that the Fed is caught between a rock and a hard place, that is, between fighting inflation and preventing a recession.
Looking ahead, the interviewee expects continued turbulence across markets as investors grapple with the above-mentioned issues. Overall, the uncertainty is “tremendous,” he said, and what’s worse, it’s spread beyond the U.S. to other economies, too.
Featured image via Shutterstock
