AE Wealth Management: Weekly Market Insights | 8/16/26 – 8/22/26

Weekly Market Commentary

THE WEEK IN REVIEW: Aug. 16-22, 2026

$40 trillion and counting

The U.S. national debt surpassed $40 trillion last week.¹ And markets, which have been ignoring pretty much everything lately, suddenly woke up and took notice of the number.² That’s what happens when we hit any milestone; we’re not really different on our 40th, 50th or 60th birthday than we were the day before, but something finally got our attention that time is passing.

In response, the bond market decided to send a message, and we experienced a pretty harsh week despite a decent rebound on Friday. After rallying for three weeks straight, the equity markets stumbled as bond yields climbed to levels we last saw at the end of July.

How did we get here? It seems pretty simple: unrestrained government spending facilitated by years of easy money thanks to the Federal Reserve. There wasn’t an entitlement program, giveaway or tax cut the government didn’t seem to like or a conflict we didn’t spend on. Everything seemed to be a crisis or an emergency. Gone was the stark divide between staunch fiscally minded conservatives and tax-and-spend liberals. Thanks to what could be called an enabling Fed, the lines blurred and no one spoke about balanced budgets or fiscal restraint anymore. All politicians, administrations and political parties have had a hand in building this mountain of debt.

We haven’t had a balanced budget since the late-’90s, and the share of the national debt now stands around $116,000 per American as of Friday.^3,4 That’s every man, woman and child, whether they’re working or not. Talk about an affordability crisis! We can’t afford our own government.

Iran conflict still in flux as the Fed sits on its hands

There’s nothing new to report with respect to Iran. It appears now that anyone who was in a position to speak on Iran’s behalf either is dead or isn’t being listened to by internal warlords who have their own agenda.

So here we are. The “four weeks” war has now been going on for six months.⁵ Just like the federal debt, everyone is willing to point fingers, but no one seems willing to own up to the fact that regime change in Iran is really the only way to end this. No amount of tough talk from President Donald Trump is going to make the Iranian regime comply with our demands.

As this stalemate continues, the Fed sits by hoping inflation remains where it is. But without a resolution to the conflict, the price of oil is just sitting there like a storm on the horizon, poised to unleash all kinds of economic damage if the awkward balance is disturbed.⁶

The minutes from the Fed’s most recent meeting showed greater openness to raising rates, with three out of the 12 voting members in favor of a hike.⁷ It seems like it’s time for the Fed to consider this path. Raising rates to combat inflation caused by an oil spike wouldn’t be beneficial, but if it might cause the government to think twice before borrowing more and adding to our debt, that would be a positive.

The meeting minutes also revealed that Fed Chair Kevin Warsh signaled a desire to scale back the number of Fed meetings from eight to six per year.⁸ That move, coupled with less guidance, would really be a step backward.

Coming this week

• No data is scheduled for release on Monday. On Tuesday, we’ll get consumer confidence, the Case-Shiller home price index and new home sales.
• The second reading of the second-quarter gross domestic product (GDP) is scheduled for release on Wednesday and is expected to remain unchanged at +1.5%.⁹ Wednesday will also feature personal income and spending, personal consumption expenditures (PCE) and MBA mortgage applications.
• Thursday will feature wholesale and retail inventories, weekly unemployment claims and the Kansas City Fed survey.
• We’ll close out the week with the University of Michigan consumer confidence survey on Friday. The number is expected to dip from 55.2 to 51, probably due to higher gas prices. The final item for the week will be the Chicago business survey Purchasing Managers’ Index (PMI).

Sources:

¹ Mary Cunningham. CBS News. Aug. 21, 2026. “National debt tops $40 trillion after doubling in less than a decade, Treasury data shows.” https://www.cbsnews.com/news/national-debt-tops-40-trillion-doubles/. Accessed Aug. 23, 2026.

² Sean Conlon, et al. CNBC. Aug. 21, 2026. “Dow surges 500 points Friday, but index posts back-to-back weekly losses.” https://www.cnbc.com/2026/08/20/stock-market-today-live-updates.html. Accessed Aug. 23, 2026.

³ Jessica Riedl. Brookings. May 11, 2026. “How did the budget get balanced in the late 1990s?” https://www.brookings.edu/articles/how-did-the-budget-get-balanced-in-the-late-1990s/. Accessed Aug. 23, 2026.

⁴ United States Census Bureau. “U.S. and World Population Clock.” https://www.census.gov/popclock/. Accessed Aug. 23, 2026.

⁵ Haley Fuller. Military.com. March 11, 2026. “Trump’s Four-Week War Estimate.” https://www.military.com/feature/2026/03/04/trumps-four-week-war-estimate.html. Accessed Aug. 23, 2026.

⁶ Business Insider. “Oil (WTI).” https://markets.businessinsider.com/commodities/oil-price?type=wti. Accessed Aug. 23, 2026.

⁷ Federal Reserve. “Minutes of the Federal Open Market Committee, July 28-29, 2026.” https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20260729.pdf. Accessed Aug. 23, 2026.

⁸ Jeff Cox. CNBC. Aug. 19, 2026. “Fed officials saw need for rate hike if inflation doesn’t cool, minutes show.” https://www.cnbc.com/2026/08/19/fed-minutes-july-2026-officials-saw-need-for-rate-hike-if-inflation-doesnt-cool.html. Accessed Aug. 23, 2026.

⁹ MarketWatch. “U.S. Economic Calendar.” https://www.marketwatch.com/economy-politics/calendar. Accessed Aug. 23, 2026.

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