At the start of this year, everyone was asking when the Fed would cut rates. As we head into September, the question has flipped entirely — a rate hike may be on the table. That kind of reversal is exactly why we don't build financial plans around what we think the Fed is going to do.
Where We Are
August turned out to be a solid month overall. Broad market indices hit new all-time highs, corporate earnings continued to impress, and the rally broadened meaningfully — small caps reached new highs alongside large caps, a healthier sign for the overall market than the narrowly concentrated leadership we've seen in recent years.
Cooling inflation data helped — July CPI came in at just 0.1% month-over-month. But the geopolitical picture complicated things again mid-month, as Iran signaled it could shift to a more offensive posture if diplomacy fails, oil ticked back up, and markets paused near their highs.
That is the pattern of 2026 in miniature: good news, bad news, and markets that keep absorbing both.
A rate hike in September seemed unthinkable at the start of 2026. Today markets are pricing it at roughly 65%. That is not a reason to panic — it is a reason to have a plan that doesn't depend on predicting it.
The Fed: Nobody Expected This Conversation
J.P. Morgan's investment strategists now say a 25-basis-point rate hike at the September 15–16 FOMC meeting is more likely than not. Futures markets agree, pricing roughly a 65% probability. The July FOMC minutes showed three dissenting votes in favor of hiking — the most hawkish split in years — and continued energy-driven inflation has kept the pressure on.
The September meeting also includes the Summary of Economic Projections — the Fed's "dot plot" — which will give the clearest signal yet on where rates are headed through year-end and into 2027. Chair Warsh has been deliberately less communicative than his predecessors, so this dot plot will carry extra weight.
What a September hike would mean
→ Renewed pressure on bonds, real estate, and growth stocks
→ Higher borrowing costs for business owners carrying variable-rate debt
→ Cash and short-duration fixed income become more attractive
→ Retirement income strategies may need to be resequenced
Something We're Watching: Off-Balance-Sheet Deals
One of the themes we've been tracking closely — one that doesn't get many mainstream headlines — is the rapid growth of off-balance-sheet financing in the AI infrastructure buildout.
The major tech companies have been financing massive AI data center construction not through traditional corporate bonds that appear clearly on their books, but through special purpose vehicles, joint ventures, and capacity agreements that keep the obligations largely invisible to casual observers. The Bank for International Settlements flagged this in a March 2026 report, calling it "shadow borrowing" — obligations that are economically equivalent to debt but structured to stay off the corporate balance sheet. Meta, Microsoft, Google, and Amazon are all participating in these structures.
Why does this matter? Because the scale is enormous, the leverage is harder to see than it appears, and it echoes the off-balance-sheet vehicles that amplified losses in the 2008 financial crisis. Private credit funds, insurance companies, and banks are all entangled in these deals. We are not predicting a repeat of 2008. We are paying close attention — and we think informed clients should too.
What this means for you
If you own significant positions in major tech names — directly or through funds — understanding how leveraged their AI infrastructure commitments actually are is part of the picture. The balance sheet you read may not tell the full story.
Other Things We're Watching
Private credit stress. Private credit has grown to a $2 trillion+ market and is facing what some call its first real test since the financial crisis. A lot of loans were made at high rates to borrowers whose margins are being squeezed. We're watching default rates and how managers respond if conditions deteriorate.
Gold. Gold hit a three-month high in August, up nearly 5% in its longest winning streak since late 2025. When gold moves strongly while equities are near records, it often signals that sophisticated investors are quietly hedging. We don't ignore that signal.
Treasury bond buybacks. The Treasury doubled its buyback of 10-to-30-year government bonds in August — an unusual intervention in the long end of the yield curve. This matters for anyone holding fixed income or thinking about how to position cash in a higher-for-longer rate environment.
The K-shaped economy. The term comes from the shape of the letter itself. After a shock, most economic recoveries move everyone in roughly the same direction — a V, a U, an L. In a K-shaped economy, the recovery splits into two arms that diverge from the same point simultaneously: one pointing up, one pointing down.
The upper arm is households and businesses with significant financial assets, real estate, and professional income — their wealth appreciated, portfolios recovered, and home values rose. The lower arm is households dependent on wages, service jobs, or without meaningful assets — they absorbed higher costs, had little cushion, and fell further behind.
You can see both arms in today's data at the same time: stock indices at all-time highs while consumer confidence deteriorates; record corporate profits alongside rising credit card delinquencies. The aggregate numbers look fine — but the averages obscure what's happening underneath.
For families thinking about legacy planning and wealth transfer, the K-shape matters in a specific way: members of the same family are often on different arms of that K. What you leave behind, and how you structure it, may need to account for very different financial realities across the people you care about most.
Fall is when it gets real. Year-end is three months away. Tax planning windows start closing. Business owners who want to act before December need to start conversations now.
If you want to refresh your plan or strategy, or know someone who needs to have theirs reviewed, let's schedule a time to visit. Just reply to this email or call me directly.
01 — Wealth Transfer
The Decision You're Already Making
An estimated $84 trillion in assets will pass between generations through 2045. It is happening in Texas families right now, quietly, whether plans are in place or not. Wealth will transfer — the question is whether it goes the way you intend or by default, on the government's terms.
Preparing to give: The 2026 estate tax exemption is $15 million per individual, $30 million per couple. Annual gifting of $19,000 per recipient carries no gift tax implications. These tools require intentional use — and the planning window is always shorter than it feels.
Preparing to receive: Inheriting wealth is one of the most consequential financial events a person can experience — and almost no one prepares for it. Tax treatment, investment decisions, family dynamics, and integration with your own plan all arrive at once.
If a wealth transfer is anywhere on your horizon — let's talk now, before the clock is ticking.
02 — Estate Documents
The Ones Gathering Dust
Wills, trusts, powers of attorney, healthcare directives, and beneficiary designations are not set-it-and-forget-it. A few things worth checking this fall:
→ Beneficiary designations on retirement accounts and life insurance — they override your will
→ Your power of attorney — does it reflect who you'd actually want making decisions today?
→ Your trust, if you have one — has it been properly funded? An unfunded trust does nothing
→ Guardian named for minor children — is that still the right person?
We work alongside estate attorneys we trust and can help you identify the gaps — then connect you with the right people to close them.
03 — Insurance
The Coverage People Assume Is Fine
Property values have risen sharply — meaning many homeowners are underinsured relative to what it would cost to rebuild. Life insurance from your thirties may no longer reflect your current obligations or net worth. Disability income protection remains the most consistently underowned coverage we see — and a potential rate hike environment makes proper coverage even more important for business owners carrying debt.
A review doesn't commit you to anything. It just tells you where you actually stand.
04 — Business Owners
The Exit You Haven't Planned
If you own a business, it is likely your largest asset — and also the least liquid and least planned for. Year-end is also when buy-sell agreements, business valuations, and succession conversations need to happen if they're going to affect your 2026 tax picture. The business owners who navigate transitions most successfully are the ones who started thinking about it years before it happened.
We work with trusted business brokers, M&A advisors, and transaction attorneys. Reach out now — not in December.
05 — The Everyday Things
That Add Up More Than People Think
Second opinions. If you have an account somewhere else and wondered whether you're getting the right advice, the right fees, or the right approach — bring it to us. We'll give you an honest assessment, no strings attached.
Mineral rights & energy income. With oil prices volatile and royalty values shifting, now is a good time to make sure your energy income is properly integrated into your overall financial picture.
Concentrated positions. A significant portion of wealth tied to one stock, one property, or one business is a risk worth managing — carefully and strategically, especially with a potential rate hike ahead.
Cash management. If rates go higher in September, the calculus on where to hold cash changes again. Make sure your idle money is working as hard as the environment allows.
Retirement income planning. A rate hike cycle has real implications for income sequencing and distribution strategy. If you're within ten years of retirement — or already there — that conversation is worth having now.
Who We Are and Who We Know
High Ridge Advisory is an independent, fiduciary wealth management practice in McKinney, Texas. We are not tied to any product, platform, or institution. Our only obligation is to you. We work with business owners, executives, energy families, landowners, and individuals navigating significant financial decisions.
Our services include
• Comprehensive financial planning • Investment management
• Retirement income & distribution • Estate & legacy planning
• Wealth transfer planning • Mineral rights & energy counsel
• Business transition & exit planning • Tax strategy coordination
• Insurance & risk review • Second opinion & portfolio review
Our network spans
If you have a need — financial or otherwise — and you're not sure who to call, call us first. If we can't help directly, we almost certainly know who can.
That's what it means to have an advisor, not just an account.
Jay Madden
Founder & Lead Advisor · High Ridge Advisory
972.632.5700
james@highridgeadvisory.com
208 E. Louisiana St., Ste. 301 · McKinney, TX
"I answer my own phone."
Investment Advisory Services offered through Csenge Advisory Group, LLC, a Registered Investment Advisor. High Ridge Advisory is not affiliated with Csenge Advisory Solutions. This commentary is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Past performance is not indicative of future results. Market data referenced reflects publicly available information as of late August 2026.