EXCLUSIVE | Gold rally signals caution for Wall Street despite strong liquidity, says GlassRatner’s Seth Freeman

Wall Street may face rising uncertainty in 2026 despite strong liquidity and a broad rally across asset classes, according to a market expert. In a conversation with ET Now, Seth Freeman, Crisis and Turnaround Manager and Asset Manager at GlassRatner said investor sentiment remains firm, supported by abundant liquidity, even as markets have seen sharp moves in currencies, commodities, and equities over the past year. He stated that the past year has been marked by significant market upheaval, including a weaker US dollar and sharp gains in oil, gold, and silver prices.

Despite this volatility, risk appetite has remained strong, helping push asset prices higher.

He said this environment has created uncertainty going into the new year, even as markets continue to reflect optimism.

Fed policy still key driver

On monetary policy, Freeman said the US Federal Reserve has indicated it may pause after its most recent 75 basis point rate cut, though future rate reductions remain possible.

“Depending on how employment shapes up in the US, there could be room for further cuts, and that would continue to support market prices,” he said.

Freeman flagged the artificial intelligence sector as a key area of risk for markets in early 2026. He said a large part of the rally in US equities has been driven by a small group of major technology stocks.

He also warned that close financial and credit linkages between AI companies and hardware manufacturers could amplify risks if growth expectations fall short.

“A slowdown or underperformance by one or two large AI players could have wider consequences due to these interconnected relationships,” Freeman said.

Credit markets face pressure

The market expert has also expressed concern over private credit and corporate debt markets, highlighting potential issues with underwriting standards.

He pointed to a significant amount of corporate debt maturing in 2026, which could force companies into restructuring and increase stress for lenders.

Is rally in gold, sign of caution?

Commenting on gold’s steady rise to record highs, Freeman said, "we are seeing strong inflows into equities, and bond investors have benefited as interest rates have declined,"

"However, the area that concerns me the most is private credit and corporate credit. There are growing risks related to underwriting standards, and there is a large wall of debt maturing in 2026," according to Freeman.

This could come as a surprise to many investors. I expect we will see an increase in corporate restructurings, pressure on lenders, and possibly some notable blow-ups in parts of the credit market, he said.

While liquidity remains supportive for markets, Freeman cautioned that hidden risks in AI-driven valuations and credit markets could test investor confidence in the coming year.

(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)