Positive momentum factors are promising reacceleration in 2026 – Edward Jones’ Mona Mahajan

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Edward Jones investment strategist Mona Mahajan anticipates a potential market reacceleration in 2026, driven by several positive momentum factors.

During an interview with CNBC, Mahajan highlighted three key elements: the Federal Reserve potentially moving rates lower, fiscal thrust from the recently enacted tax bill, and substantial cash reserves that could re-enter the market.

She expressed optimism about the long-term market outlook, despite recent volatility concerns.

“We do see this possibility that we could get this reacceleration in 2026,” she noted, suggesting that as interest rates potentially decline over the next year, investors currently sitting on the sidelines might be enticed to reinvest.

She said that if the Fed moves rates toward a more neutral level of around 3.5%, investors could begin reallocating funds from money market accounts back into equities (SP500 [https://seekingalpha.com/symbol/SP500]), (COMP:IND [https://seekingalpha.com/symbol/COMP:IND]), (DJI [https://seekingalpha.com/symbol/DJI]).

Regarding Nvidia’s (NVDA [https://seekingalpha.com/symbol/NVDA]) anticipated earnings report, Mahajan described the company as “a bellwether for the AI technology trade.”

She projected strong results with revenue growth exceeding 50% year-over-year, albeit slower than previous triple-digit gains. “We think the AI technology story is one that investors have to have exposure to,” Mahajan emphasized, characterizing artificial intelligence as a “secular theme” with a three-to-five-year forward outlook.

On the topic of Federal Reserve independence amid political pressures, Mahajan expressed confidence in the system’s resilience. “The American people still have faith in the overall process in the system and that Fed independence will remain intact in some way, shape, or form,” she stated.

She noted that while individual governors have certain responsibilities, broader monetary policy is determined by the 12-member FOMC board, making it difficult for one or two members to significantly sway decisions.

Addressing inflation concerns, Mahajan acknowledged potential pressures from tariffs and stimulus but maintained a relatively optimistic outlook. While she suggested inflation might rise to the 2.5-3.5% range, she doesn’t anticipate a return to the 8-9% levels experienced post-pandemic.

“Despite near-term inflationary pressures, we think the Fed is focused on labor market and of course 2026 looking better than this time,” she concluded.

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