1-13-26 The Economic Reflation Narrative Is Back

The economic reflation narrative is back—but is it durable or just another market storyline driven by optimism and liquidity?

Lance Roberts explains what investors mean by “economic reflation,” why markets are once again pricing in stronger growth, and which data points are reinforcing the bullish case. We examine the role of monetary policy shifts, fiscal spending, labor market dynamics, and commodity trends that are supporting expectations for improving earnings and profitability.

Just as importantly, we address the risks to the reflation narrative. Sticky inflation, slowing global growth, tighter financial conditions, and policy missteps could all challenge the assumption that reflation is sustainable. Markets often price in best-case outcomes long before the data confirms them—and that gap can matter for portfolio risk.

We close with practical investor considerations, focusing on risk management, diversification, and how to think about portfolios when markets are caught between reflation optimism and late-cycle realities.

This discussion is designed for investors seeking context, not predictions, and a disciplined framework for navigating shifting macro narratives.

Visit RealInvestmentAdvice.com for daily market commentary, portfolio strategy insights, and risk-management tools.

0:00 - INTRO
0:19 - One Dad on Money - The Reflation Narrative preview
2:03 - Markets Rally Despite Powell Probe
7:33 - JPMorgan performance & Q4 Earnings Structure
12:33 - Optimism for 2026 - Rate of Inflation Slowing
14:42 - Goldman Survey: Everyone is Bullish About Everything All at Once
16:31 - The Premise of Economic Reflation - Three Reasons
19:01 - The Flaw in the Reflation Narrative
23:14 - Good Consensus for High Market Returns in 2026
24:19 - Why Valuations Matter
28:17 - Wilshire 5000 vs GDP Ratio Explained
29:50 - Why Cut Rates if Economy is Growing?
30:57 - The Biggest Risk to Economy - Geopolitics
33:55 - Sectors to Benefit from Reflation Narrative
36:20 - Risks from the Reflation Narrative
37:24 - The Nirvana of Reflation is Driving Markets
40:23 - Top Ten Percent vs the Rest of Earners
42:18 - What Does the Reflation Narrative Mean for the Average Person?
43:28 - The Risk from the Reflation Story

Hosted by RIA Advisors Chief Investment Strategist, Lance Roberts, CIO
Produced by Brent Clanton, Executive Producer
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Articles Mentioned in Today's Show:
"Investor Lessons From 2025 For 2026"
https://realinvestmentadvice.com/reso...
"2026 Earnings Outlook: Another Year Of Optimism"
https://realinvestmentadvice.com/reso...
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Watch our previous show, "Investor Lessons From 2025 for 2026" here:
   • 1-12-26 Investor Lessons From 2025 for 2026  
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The latest installment of our new feature, Before the Bell, "Market Turbulence - Earnings Test Ahead," is here:
   • 1-13-26 Market Turbulence - Earnings Test ...  
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