2026 Things to Watch

As we begin a new year, we at Obsidiant Partners are focused on several key developments that we believe will influence markets, investment opportunities, and economic conditions in the months ahead. 

Our goal is not to predict the future with certainty — but to identify the forces most likely to shape it. 

Will AI Investment Deliver Profitable Results? 

Artificial Intelligence continues to attract extraordinary levels of investment. Billions of dollars have been deployed into data centers, computing infrastructure, and model development, driven by the promise of higher productivity and more efficient business operations. 

Market performance has reflected this enthusiasm. However, broad and consistent evidence of profitability from these investments remains limited. While market performance, specifically equities, may continue to outpace the tangible results, we are of the opinion that evidence of profitability is still preferred by investors in the long-term to justify ever increasing valuations. (https://www.stlouisfed.org/on-the-economy/2026/jan/tracking-ai-contribution-gdp-growth) 

The key question for 2026: when does technological potential translate into durable financial results? 

The Federal Reserve’s Next Moves 

How many more interest rate cuts will the US Federal Reserve (the Fed) implement this cycle? The Fed faces a complex policy environment. Its dual mandate — managing inflation while supporting maximum employment — is being tested by slowing domestic growth, evolving trade policy, geopolitical uncertainty, and rapid technological change. 

Recent data suggest the economy is moderating, even as new tariffs introduce inflationary pressures. To date, domestic producers have largely absorbed the increased costs from tariffs imposed on imports, thereby reducing their profit margins instead of passing the costs to their customers (https://www.blackrock.com/us/financial-professionals/insights/tariffs-economy-and-portfolio). 

This absorption may be the result of either wanting to maintain market share, not wanting to run afoul of the current administration’s objectives, or a combination of both. 

Regardless, how long companies can sustain this approach may ultimately depend on shareholder tolerance and access to financing. 

The path of future interest rate cuts — and their impact on markets — remains a central theme for investors this year. 

A Shifting Employment Landscape 

Employment growth slowed notably in late 2025. One contributing factor has been increased adoption of automation and AI, reducing demand for certain categories of labor. 

If this trend continues, policymakers may need to reconsider traditional definitions of “full employment.” Society may also face new questions around how to balance higher productivity with potential labor displacement. 

This is an area where economics, technology, and public policy increasingly intersect. 

Quiet Credit Markets 

Despite an active Federal Reserve, volatile trade policy, geopolitical tensions, and rising delinquencies in certain sectors, credit markets have remained unusually calm. (It’s Quiet, Too Quiet, on the Bond Market Front - Bloomberg). Treasury yield ranges are narrow, and risk premiums in corporate and private credit markets are historically tight. 

Investor demand for yield remains strong, contributing to looser lending standards and reduced covenant protections in some private credit transactions. While this environment can persist for extended periods, history suggests that prolonged credit complacency deserves close attention. 

At Obsidiant Partners, we view disciplined risk assessment as essential in this phase of the cycle. 

Beyond Markets: The Business of College Athletics 

Our approach at OP is to also keep an eye on evolving opportunities beyond traditional financial markets. And being here in the state of Indiana, we would indeed be remiss if we did not first give a shout out to the Indiana Hoosiers, recent winners of the College Football Playoff’s championship, winning the national title for the first time in Hoosier football history. 

We have been watching as college programs like Indiana and so many others all across the country are being impacted by the rapid growth of Name, Image, and Likeness (NIL) agreements, which has transformed college athletics into a true talent marketplace. 

Innovative programs are now using NIL structures and the transfer portal to attract and retain top athletes — much like competitive employers in any industry. We are particularly interested in how Historically Black Colleges and Universities (HBCUs) might participate more fully in this evolving ecosystem as interest in HBCU programs continues to grow. 

Obsidiant Partners is developing relationships with experienced partners in this space to explore advisory opportunities where meaningful, long-term financial outcomes for institutions and student-athletes may be created. 

Looking Ahead 

2026 presents a landscape shaped by technological transformation, evolving monetary policy, shifting labor dynamics, and unusually calm credit conditions. Navigating this environment will require selectivity, patience, and a focus on fundamental value. 

We look forward to the year ahead and to continuing the conversation with our clients and partners. 

Cheers! 

— Obsidiant Partners 

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