NEW YORK, January 22, 2026 — Global markets are navigating a particularly turbulent period, with the unpredictable influence of Donald Trump injecting significant uncertainty into the economic landscape. Investors are bracing for potential shifts in policy and sentiment, as the world order feels increasingly unstable, according to a leading financial advisor.
A Shifting Chessboard
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Experts warn that policy changes and volatile sentiment, particularly in the U.S., are creating a precarious environment for investors.
- The current global macro environment is marked by persistent uncertainty, largely driven by developments in the United States.
- Donald Trump’s continued influence is a major concern, with his actions potentially reshaping the world order.
- Consumer sentiment in the U.S. is fragile, with high credit card debt and rising defaults in the used car market posing risks to banks.
- Emerging markets, including India, are poised to benefit from shifting capital flows.
- Policy surprises, such as sudden capital gains tax announcements, could undermine investor confidence.
Seth R Freeman, from GlassRatner Advisory, described the current situation as “a moving chessboard, especially given the ongoing chaos that Donald Trump is causing—not only in terms of markets, but possibly in terms of the world order changing.” He questioned whether a return to “normal” is even on the horizon, expressing concern about the permanence of these shifts.
What’s the biggest risk to the U.S. economy right now? According to Freeman, it’s not necessarily systemic failures, but rather a change in sentiment. “Even if the world is functioning, sentiment—both on the investor side and on the consumer side—can shift,” he explained. He pointed to high consumer credit card debt and a surge in defaults in the used car market, impacting banks specializing in subprime credit, as key vulnerabilities.
Trump’s Enduring Influence
Despite ongoing legal challenges, Trump’s influence remains strong. “Yes, he is not slowing down in the least,” Freeman stated. He cautioned that the real danger lies in how this impacts investor and consumer confidence.
Proposed policy changes are also adding to the uncertainty. A plan to cap credit card interest rates at 10% could backfire, Freeman argued. “It is going to be detrimental to consumers. It is going to be hard for the banks, but the banks’ reaction, if their interest rates are capped at 10%, is that they are just not going to issue credit cards. There is a big piece of the U.S. consumer market that really needs credit, and banks and credit card issuers customarily factor in a sizable loss factor. Ten percent is going to make it completely unprofitable.”
Volatility and Institutional Investors
Looking ahead, Freeman anticipates continued volatility, particularly as the midterm elections approach and policy focuses on domestic consumption. “It just creates a volatile sentiment situation,” he said, noting the speed with which institutional capital can move. “There is a real risk that some people in Manhattan are going to wake up in the morning and the risk committee is going to say, ‘We have to do X,’ or from London or Switzerland.”
India and Emerging Markets Poised to Benefit
Against this backdrop of global uncertainty, emerging markets—and India in particular—are attracting increased attention. “If you look at what happened in the fourth quarter, the flows to emerging markets and to India were incredible,” Freeman observed. “The returns for people in EM funds were finally being highly rewarded. I actually think that in terms of relative growth rates, you are going to see more money coming into emerging markets, which is positive for India.”
However, Freeman noted that foreign institutional investor (FII) holdings in India are currently at a decadal low, despite strong domestic inflows. He attributed this to relative returns and currency risk. “It is very risky for U.S. investors to invest in the Indian market when the rupee takes a hit because you can end up with a double-whammy—rupee devaluation and the market going down.” He added that significant foreign capital is still entering India through private equity channels.
Caution on the Union Budget
Regarding the Union Budget, Freeman advised against any unexpected policy announcements. “If something like a sudden capital gains tax announcement happens, that would be detrimental. But I think the government has learnt a lot of lessons from that experience,” he said, adding that easing investment-related provisions would help restore confidence, especially for long-term infrastructure projects.
Finally, Freeman offered a measured assessment of China’s role in the shifting global landscape. “The Trump administration has not focused on China as much recently,” he said. While tariffs have had a less significant impact on U.S. consumers than anticipated, he doesn’t expect China to dominate the narrative as it once did.
As global investors adjust to a world of policy uncertainty, shifting alliances, and fragile sentiment, Freeman’s message is clear: growth differentials and stability will be key drivers of capital flows, positioning emerging markets like India for continued success on the global stage.
