Thomas Hughes expects WTI to push above $120 in the near term and then crash, possibly back to the low $60s, almost as soon as the Iran war ends.
Markets have spent the new Fed chair's tenure complaining about the forward guidance that used to accompany every decision. Hughes thinks its disappearance is an improvement, and that the old practice was worse than merely unhelpful.
"The Fed's job is to react and respond to the market, not to lead and to guide it."
Hughes has written for MarketBeat since 2019 and runs Passive Market Intelligence, the market-research platform he founded in 2023, and his stock picks here are screened on one criterion rather than on a sector view.
I listened to the full interview so you can skip it. 18 minutes of audio, 11 minutes of reading.
Here are the 7 calls that matter.
👤 Guest: Thomas Hughes, an analyst who has written for MarketBeat since 2019 and is Managing Partner of Passive Market Intelligence, the research platform he launched in 2023
🎙️ Host: Bridget Bennett, who presents MarketBeat's video interviews and runs Bridget's Buys, the site's weekly tracked stock-idea list
📰 Published: 10 September 2026 on YouTube (MarketBeat)
🔴 YouTube | 🟣 Apple Podcasts | ⏱️ 18 min | ✅ Time saved: 7 min
Key Takeaways
Rates are not coming down, and he thinks "the new normal is just normal"
His advice is to expect the current level for at least the next few quarters, with upside risk in the near term
He defends the absence of forward guidance in unusually strong terms
He calls the Fed's old practice of telegraphing moves "crony capitalism" that was "helping rich people stay rich"
Oil is the single most influential factor on inflation because it compounds through the system
The consumer pays a higher gas price, then pays it again inside the price of everything bought from someone who also pays it
His oil call has two halves that point opposite ways
Above $120 on WTI in the near term, then a crash almost as soon as the Iran war ends, with forecasters looking for massive oversupply next year
The screen behind all three picks is one criterion, not three: healthy balance sheet, pricing power and reliable cash flow, with cash flow the item that makes the other two matter
Higher rates are a margin story for JPMorgan, not a traffic story
What counts is net investment income, the money the bank earns on its own investments and cash pile
Exxon Mobil earns its place by how it behaves in the bust, not the boom
It holds capital returns steady through the cycle instead of raising and cutting them with the oil price
A crash in oil would make Exxon a better buy, not a broken one, on his framing that a lower price on a reliable payer is an improvement for a long-term holder
Alphabet is his low-risk way to own AI because it does not have to borrow to build
The other hyperscalers and the neoclouds are taking on debt for the same buildout
1. Rates Aren't Coming Down
Bridget Bennett opened by noting that the president has spent his entire term pressing for lower rates, and asked whether Hughes sees that happening.
His answer was no, with a caveat about direction rather than level. There is debate about where rates go from here, but down is probably not one of the options
The two conditions holding them up are oil and inflation, and he argues the first cuts both ways: if oil fell, that would spur economic demand, which would keep inflation up on a demand basis instead
He rejects the vocabulary the last cycle produced. On "the new normal" and "higher for longer": "the new normal is just normal and higher for longer just means rates are going to be where they are now for the foreseeable future"
What he tells investors to prepare for is stasis with a tilt. There is some upside risk in the near term, but the base case is rates staying roughly where they are for at least the next few quarters
2. Warsh Won't Telegraph
Bennett raised the change investors have actually noticed: the new chair does not publish guidance or predictions about where policy is heading, and asked whether that leaves room to be surprised this year.
He agreed, and turned it into a definition. "Oh, whatever they do will be a surprise because of what you said"
He endorses the policy rather than merely accepting it. "Warsh does not want to telegraph his moves to the market. I think that is smart"
His objection to the old practice is distributional. "I think that the Fed that had been telegraphing moves to the market was really just an example of crony capitalism" — a central bank telling rich people what to do before they made their moves. "You know, it's helping rich people stay rich"
The upside he sees is an economy left to function. Without the signal, in his framing, the economy runs on its own rather than on what the Fed has announced
He states the institutional principle plainly. "The Fed's job is to react and respond to the market, not to lead and to guide it"
3. Why Oil Runs Everything
Bennett asked him to connect the oil price to the rate path directly. His answer is a mechanism, not a correlation.
The claim is a ranking, not a contribution. "So oil prices are the single most influential factor on inflation"
The reason is that the same cost is paid more than once. A consumer pays a higher pump price; the businesses that consumer buys from also pay it and pass it on; their own suppliers raise prices on them, and it trickles through the system. "So, when oil prices go up, everybody's prices go up"
The supply picture behind today's price is specific. "Right now, oil prices are high because of the Iran war. We've lost capacity" — plus constraints at the Strait of Hormuz keeping supply tight, and storage at multi-year and multi-decade lows
His near-term number is higher than spot. "Probably going to head to 110, 115" on the recent reescalation, with a possible new high
The second half of the call is a crash. "Longer term though, I see oil prices crashing potentially. I mean really almost as soon as we see an end to the Iran war, the oil prices will crash"
Two things would drive that, not one. The constraints come off, and the industry is already working around them by reestablishing routes and supply chains, so recovery would be fast
He cites official forecasts and then discounts them. The EIA and the IEA are both forecasting serious oversupply next year and lower prices, with some looking for WTI back to the low $60s. "Now, those forecasts show just how unpredictable this market can be"
4. What He Screens For
Before naming any stock, Bennett asked what he is looking for in a high-rate, high-oil environment. His screen has three items and a hierarchy.
The three qualities are a healthy balance sheet, pricing power and reliable cash flow, which he says are shared by stocks that perform through business cycles: "they have healthy balance sheets, they have pricing power and they have reliable cash flow"
Cash flow is the one that makes the others work. He calls it the linchpin, because it both lets a company pivot when the economy turns and lets it sustain capital returns
His reason for caring about capital returns is a claim about what drives the market. "When your stocks are paying you to own them, when they're providing value, then they're able to sustain their value and increase their value over time"
5. Why JPMorgan Wins
His first pick is the financial sector, and inside it the largest bank by market capitalization.
He calls JPMorgan Chase the premier bank on size and on the stability of its cash flow
He concedes the obvious cost of higher rates and says it is the smaller half. Higher rates probably do impair traffic at the counter with consumers and some businesses
The larger half is the asset side. Where the bank makes its money is its investments and its cash pile, through net investment income: "So, higher rates for a bank means higher margins"
The payout is accelerating alongside earnings. He describes the bank as a capital-return machine, with an above-average dividend and buybacks reducing the share count, both accelerating with earnings growth
Bennett put the recent chart to him — the stock up about 13% in the last three months — and he called it a combination of solid performance, resilient economic conditions and higher rates, and an extension of a much longer uptrend
Asked why the absence of tech-style returns matters, he reframed the holding. "This is a compounding play for long-term investors where you can put money in, reinvest your dividends, watch your capital grow over time"
On whether higher rates help every financial stock, he said it is case by case. The test is whether a bank is spending money servicing its own debt or reaping the rewards of other people's, and for JPMorgan: "They've got better than warranted tier one capital ratios"
His summary of the whole position is one sentence. "It's the amount of money it makes off of its money that counts"
6. Exxon Through the Cycle
His second pick is an oil major, which he acknowledged sits oddly inside a buy-and-hold screen.
He named the tension himself and then answered it. "But Exxon Mobil is a very well-run company" — it makes more when oil is up and less when oil is down, like everyone else
The difference is behavior in the bust. Other energy companies raise and cut capital returns with the boom-bust cycle; "Exxon is more prudent", running a managed, measured payout so that boom-time cash strengthens the balance sheet and sustains the payout through the downturn
What that buys an investor is a reliable, growing payout compounded by buybacks, which he calls a premium quality in the sector
Bennett put his own crash forecast to him as an objection. His answer inverts it: a falling stock price creates volatility but, in a long-term holding, "When the stock price falls, it's just a better buy than it is now"
On buying it at the highs instead, he pointed at the cash flow in front of him. Bennett noted the stock is up over 36% since January and 46% over the last year; he said oil prices are still high and still rising, "Yeah, I think that we could see WTI above 120 pretty soon", and "Cash flow is going to be wicked hot over the next quarter or two"
He dismissed the last quarter's small miss as noise against a very high bar. "The energy companies grew their earnings more than 100%. That's good. A slight miss to me is nothing. It caused some price weakness. That's a buying opportunity"
Asked about the rest of the sector, he pointed at refiners rather than producers. They are paying more for crude but getting even more for their product, which he identified as the crack spreads, producing robust cash flow, share buybacks and dividend increases this year
7. Alphabet Funds Itself
His third pick is a technology stock, which he again flagged as the counterintuitive choice in a low-risk screen.
He puts Alphabet in a small group of blue-chip mega-cap technology companies with a fortress balance sheet. "They have strong cash flow, massive cash piles. They've got monopolies"
The monopoly he names is advertising. "Google's monopoly is ad driven estimated 90% of the market share and a nearly unmatched capacity to self-fund its growth"
The rate sensitivity he cares about is the borrowing channel. "Google doesn't need to lean into debt to grow", which is what separates it from startups exposed to higher rates
Bennett raised the recent chart against him — up 37% over the last year but down 8% in the last month — and he called it repositioning and normal market mechanics inside an AI-driven rally
His scale comparison is the reason he treats the pullback as small. Google advanced from 80 to over 360 over the last couple of years, which he put at about a 400% increase, so some give-back is natural, and support is showing at or above the previous highs
He separates the company from the chip suppliers deliberately. It is not the source of GPUs the way Nvidia or AMD are; it is one of the largest hyperscalers, and "In many ways, Google is the internet"
On the AI buildout risk, he says Alphabet carries the least of it. The other hyperscalers and the neoclouds have to take on debt to fund their buildout: "Google's just building what it needs with the cash that it has"
On the latest results he saw no reservations. Acceleration, growth, profitability, and the company actually monetizing its AI, with no red flags
He would not extend the recommendation to the sector. "Tech sector is where you find growth, but there's lots of volatility", it is not a low-beta sector, and an investor looking for low-volatility buy-and-hold names should mostly look elsewhere
Hughes's bottom line is that an investor should stop forecasting the Fed and the oil price and buy the three things that work whichever way both go — a bank whose margin widens with rates, an oil major that pays the same through the cycle, and the one hyperscaler that funds its own buildout out of cash.
Bonus Insights
Bennett said on air that she would add Alphabet to the watch list she keeps for the channel, noting she has rarely added mega-cap names to it and wanted to follow the price from here
The oil forecast he cites is a forecast he does not trust the timing of. He says there is an outlook for a massive industry recovery next year, and then that "when it happens is real questionable" — which is why the oil pick is framed around behavior through the cycle rather than around a price target
His case for JPMorgan rests on the liability side being someone else's problem. The distinction he drew was between a bank spending money to service its own debt and a bank collecting on other people's, which is the same test he applied to Alphabet's ability to build without borrowing
Bennett's own framing supplied the episode's structure. She set up each pick by asking about the chart first and the earnings second, which is what pulled the specific percentage moves out of him rather than a general view of each name
Products, Companies & Tools Mentioned
JPMorgan Chase (His financial-sector pick: the largest bank by market capitalization, where higher rates widen margins through net investment income)
Exxon Mobil (His energy pick, chosen for holding its capital returns steady through the boom-bust cycle rather than for the oil price)
Alphabet (His technology pick: a fortress balance sheet, an ad monopoly he puts at about 90% share, and a buildout funded from cash rather than debt)
Nvidia and AMD (Named as the GPU suppliers Alphabet is not, to place it as a hyperscaler rather than a chip vendor)
The US Energy Information Administration and the International Energy Agency (Both forecasting serious oversupply and lower prices next year, with some looking for WTI back to the low $60s)
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