Oil Remains Primary Risk Driving Higher Rates Says Haworth

Watch on YouTube ↗  |  September 18, 2026 at 21:54  |  7:08  |  Bloomberg Markets
Speakers
Rob Haworth — Senior Investment Strategy Director at U.S. Bank Asset Management

Summary

Rob Haworth of U.S. Bank Asset Management discusses the Fed's inflation fight, oil-driven inflation risks, and the durability of the equity market's earnings story. He expects additional Fed hikes by mid-next year, sees oil supported by tight supplies and solid demand, and favors energy while noting broadening earnings across healthcare and small caps. He also says AI productivity benefits are still early and need more quantification in third-quarter earnings.

  • Fed is emphatic on inflation; market prices two or three more hikes by mid-next year.
  • Real yields have risen while 10-year inflation expectations have not.
  • Oil prices are supported by solid demand and low SPR/commercial inventories.
  • Energy has strong earnings and performance; market breadth is improving.
  • S&P 500 earnings expectations remain positive but slower in 2027.
  • Healthcare and small caps are seeing improving earnings.
  • AI productivity benefits remain early and unquantified; Q3 earnings may provide clarity.
Ideas
Rob Haworth Senior Investment Strategy Director at U.S. Bank Asset Management 1:33
Fed hikes drive short-term Treasury yields higher.
The Fed is committed to fighting inflation, and the market has come around to that view. The speaker notes the market is pricing two or three more hikes by mid-next year, with 50% odds for October and 90% odds of another by year-end. Real yields are already rising while 10-year inflation expectations are stable, so short-term yields are likely to stay under upward pressure and short-maturity Treasury prices should remain weak.
SHY MED
Rob Haworth Senior Investment Strategy Director at U.S. Bank Asset Management 3:38
Oil bullish on tight supply, solid demand.
Oil prices are set by daily supply and demand, and solid employment means households and businesses must travel and consume oil, gasoline, diesel and related fuels. At the same time, supplies are dwindling: the Strategic Petroleum Reserve is the lowest since 1983 and commercial inventories are below the five-year average, leaving the market short of barrels and keeping oil a key inflation risk driving rates higher.
WTI HIGH
Rob Haworth Senior Investment Strategy Director at U.S. Bank Asset Management 4:30
US equities durable on broadening earnings.
S&P 500 earnings are expected to remain positive, with 30% growth expected for 2026 and 14% consensus for 2027. The earnings story is broadening beyond tech into energy, healthcare and small caps, which gives the market durability even if Fed rate hikes create volatility; he notes equity portfolios are still producing double-digit returns.
SPY MED
Rob Haworth Senior Investment Strategy Director at U.S. Bank Asset Management 4:57
Energy equities strong earnings and performance.
Energy has been a great place to be this year from both an earnings and performance perspective, and it is part of the broadening earnings story beyond technology, adding durability to the equity market.
XLE MED
Rob Haworth Senior Investment Strategy Director at U.S. Bank Asset Management 5:05
Healthcare gains from earnings and AI.
Healthcare earnings are starting to tick higher, and healthcare is an early example of an industry seeing good benefits from AI productivity gains, suggesting room for further improvement.
XLV MED
Rob Haworth Senior Investment Strategy Director at U.S. Bank Asset Management 5:07
Small caps have improving earnings.
Small-cap earnings are starting to get better, reflecting the broadening earnings story beyond large-cap technology and supporting the durability of the equity market.
IWM LOW
Rob Haworth Senior Investment Strategy Director at U.S. Bank Asset Management 5:56
AI productivity theme needs Q3 confirmation.
The widening group of AI productivity beneficiaries beyond direct picks-and-shovels companies is still early, and benefits are not yet quantified, but usage is broad and global competition means the buildout will continue. Third-quarter earnings should provide more data, with healthcare an early example; he says investors should give room for this growth story.
AI-SECTOR MED
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This Bloomberg Markets video, published September 18, 2026, features Rob Haworth discussing SHY, WTI, SPY, XLE, XLV, IWM, AI-SECTOR. 7 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Rob Haworth  · Tickers: SHY, WTI, SPY, XLE, XLV, IWM, AI-SECTOR