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Bombshell Fox News Article: You Don't Own the Stocks in Your 401(k)

In a bombshell Fox News article, New York Times bestselling author and Heartland Institute vice president Justin Haskins warns that...

As he puts it, "most investors no longer directly own their securities. Instead, they hold what the law refers to as a 'security entitlement.'"

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Secured creditors "may seize securities used as collateral... This can include customer securities, such as stocks and bonds."

In normal markets, the system hums. But in a severe financial shock, customer protections will be tested.

Remember the Lehman collapse? Or how MF Global mishandled client funds? Liquidity froze when confidence vanished.

"The next financial crash could arrive sooner or later," Haskins writes. "What is predictable is the legal structure waiting on the other side."

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For most of 2025, Wall Street could still cling to one comforting idea: growth might slow, inflation might cool, and the Fed would eventually ride in with multiple cuts and a tidy soft landing.

That story is now under real pressure.

The March flash PMI data showed U.S. business activity slowing to an 11-month low, while firms simultaneously reported sharply higher prices tied to war-driven energy costs and supply disruption. S&P Global’s composite index fell to 51.4, and its chief business economist said the data point to annualized GDP growth of only 1.0%. That is not recession territory yet, but it is slow enough to make the market nervous and hot enough on prices to keep the Fed trapped.

This is why the “Stagflation 2026” theme suddenly feels less like a pundit’s buzzword and more like a market regime.

Growth is not collapsing. It is decelerating. Inflation is not spiraling everywhere. But the parts of inflation that matter most to central banks and bond markets, especially energy-linked input costs and pricing expectations, are moving in the wrong direction at the same time activity is losing momentum.

The market tends to obsess over payrolls, CPI, and Fed meetings. But PMI reports often tell you what is changing before the headline data fully catches up.

That is why Tuesday’s release matters.

S&P Global said the composite output index fell from 51.9 to 51.4, its lowest since April of last year. The services side was the bigger problem. Service-sector activity slowed to an 11-month low, with weaker inflows of new business and a sharper loss of export sales. Companies cited rising geopolitical uncertainty from the Middle East war and ongoing concerns about federal spending.

The manufacturing side was somewhat firmer, but even that carried a warning label. Output improved modestly and new orders rose at the fastest pace in five months, yet part of that reflected inventory-building and efforts to lock in supply and pricing early. That is not always a sign of healthy end demand. Sometimes it is a sign that companies are getting defensive.

The inflation side of the report is where the nightmare begins.

S&P Global explicitly said firms reported a spike in prices as war in the Middle East pushed up energy costs and created supply delays. Reuters summarized the same report by saying business growth slowed while prices surged, a combination that strikes directly at the soft-landing thesis.

Jerome Powell’s problem is no longer theoretical.

The Fed held its benchmark rate steady at 3.50%–3.75% on March 18 and still projected just one quarter-point cut in 2026. But the tone of the meeting was much more cautious than that unchanged median forecast might suggest. Reuters reported Powell stressed that higher energy prices will push up inflation in the near term, and that policymakers have no clear read on how large the economic effects might become.

More importantly, Powell admitted the Fed is in a “difficult position” because it must weigh higher inflation risk against downside labor-market risk. He also said the possibility that the Fed’s next move “might be an increase” came up at the meeting, even if that was not the base case for most officials. That single admission matters. It tells traders the central bank is no longer operating from an easing bias. It is operating from a risk-management posture.

That is the death of the old script.

In the old script, softer growth automatically increased the odds of rate cuts. In the new script, softer growth can coexist with hotter prices, which means the Fed does not get to ride to the rescue. Reuters reported that rate futures now suggest little chance of cuts before 2027. That is a violent repricing of monetary-policy expectations.

A soft landing requires three things to happen at once.

First, growth needs to cool without stalling.
Second, inflation needs to keep easing.
Third, the Fed needs room to cut rates gradually without reigniting price pressure.

Right now, only the first condition is even partially holding.

Growth is cooling. But it is cooling into a fresh energy shock. S&P Global said the first quarter is tracking around 1.3% growth, the weakest quarterly pace since late 2023. Meanwhile, the price side is reaccelerating. Powell himself said higher energy prices will lift inflation in the near term.

That leaves the Fed stuck between two bad options.

If it eases too soon, it risks validating higher inflation expectations at exactly the wrong time.
If it stays tight too long, it risks turning a slowdown into something more serious.

That is what makes this a genuine stagflation scare rather than a routine macro wobble.

Not every part of the market hears “stagflation” the same way.

Long-duration growth stocks tend to struggle because higher rates and hotter inflation compress the value of future earnings. That is part of why Reuters noted investors have grown pessimistic about cuts, with equities wobbling as oil and yields rise.

Cyclicals tied to discretionary demand also face pressure if growth slows further. Services weakness in the PMI report is a warning that consumer and business activity may be getting less willing to spend freely.

Energy-linked names, select commodities, and some cash-flow-heavy value sectors can look more attractive in this regime, at least tactically, because they benefit from the inflation side of the equation even as the broader market struggles with the growth side. That does not mean all commodity exposure works automatically. It means leadership becomes narrower and more macro-sensitive.

Banks and financials are more nuanced. They may benefit from higher-for-longer rates in theory, but slower activity and weaker credit conditions can offset that advantage if the slowdown deepens.

For traders, this is less about one data point and more about how the market digests the combination.

The key macro signal is whether bad growth data continues to push stocks lower without producing the usual bond-market relief rally. If weak activity no longer creates cut hopes, then old dip-buying playbooks become less reliable. That is the practical implication of the rate repricing Reuters described.

The second thing to watch is whether equity leadership narrows further into inflation hedges and away from long-duration secular growth. If that rotation persists, it confirms the market is starting to believe the stagflation setup rather than merely discussing it.

Third, watch the next round of inflation and labor data through the lens Powell just gave you. The Fed is no longer asking only whether growth is cooling. It is asking whether cooling growth is happening fast enough to matter more than renewed price pressure. That is a very different hurdle.

The bull case for markets is that this PMI report proves temporary rather than regime-defining. In that version, energy prices stabilize, supply disruptions ease, and the next round of inflation data does not confirm a durable reacceleration. Growth remains soft but positive, and the Fed regains room to cut later this year or early in 2027.

The base case is more uncomfortable. Growth keeps slowing, inflation stops improving, and the Fed stays sidelined far longer than markets once expected. That leaves equities in a choppy, selective environment where valuation multiples stay under pressure and macro-sensitive sectors dominate leadership. Reuters’ reporting on futures implying no cuts before 2027 fits this scenario most closely right now.

The bear case is that stagflation worsens from scare to trend. In that version, oil stays elevated, price pressures broaden, consumer and business demand weaken further, and the Fed is forced to consider even tighter policy despite deteriorating activity. Powell’s acknowledgment that even rate hikes were discussed shows that this tail risk is no longer unthinkable.

Traders should focus on confirmation, not nostalgia.

First, watch whether the next macro releases reinforce the PMI message. If growth indicators keep slipping while inflation-sensitive inputs remain hot, the stagflation narrative becomes harder to fade.

Second, keep watching the rate market. The most important macro chart now may be the path of Fed-cut expectations. If futures continue pushing easing farther out, equity multiples remain vulnerable.

Third, pay attention to sector leadership rather than headline index moves. In stagflationary tapes, the index can look messy while specific groups quietly tell the real story.

Fourth, respect Powell’s language. When the Fed chair tells you the central bank is in a difficult position and admits even hikes were part of the conversation, that is not background noise. That is the policy regime speaking clearly.

The March PMI report may not mark the start of a recession.

But it does mark something important: the soft-landing story is no longer the market’s default assumption.

Business activity has slowed to an 11-month low. S&P Global says the economy is now tracking around 1.0% annualized growth in March. Prices are rising again. Powell says the Fed is in a difficult position, and the market has already repriced the odds of multiple 2026 cuts close to zero.

That is why “Stagflation 2026” matters.

Not because it is a catchy macro label, but because it changes how traders should interpret weak data, rate expectations, sector leadership, and risk.

_{Editorial Disclaimer}

_{This commentary is for informational and educational purposes only and does not constitute investment advice. All market strategies involve risk, and past performance is not indicative of future results. Readers should conduct their own analysis or consult a licensed financial professional before making investment decisions.}