Timmer Questions 60/40 Portfolio Revival Amid Weakening Stock-Bond Link
Fidelity's Jurrien Timmer questions the 60/40 portfolio comeback as higher Treasury yields sustain a positive stock-bond correlation.
Jamie Dimon warned of a $10 trillion small-business ownership risk; Mark Zandi cautioned the Fed could make a serious policy mistake.
This week, two prominent Wall Street figures delivered warnings that have not yet moved markets. Although Jamie Dimon and Mark Zandi seldom agree, they are both pointing to structural dangers.
Jamie Dimon, CEO of JPMorgan, has raised concerns over a massive shift in small-business ownership. Meanwhile, Mark Zandi, chief economist at Moody's Analytics, argues that the Federal Reserve might harm an economy that appears more fragile when AI-driven growth is excluded.
According to a Chase survey that polled roughly 1,000 small-business owners, 70% are either in the early stages of planning for leadership succession or have no plan at all. Just 8% reported being completely ready to hand over their businesses.
Approximately 12 million US businesses, with an estimated total value of nearly $10 trillion in assets, are set to change ownership over the upcoming 10 to 15 years. In strategically critical sectors, more than half of companies have owners who are 55 or older.
Dimon has cautioned that the “American Dream is alive, but it’s slipping out of reach for too many people.”
When transitions are handled poorly, they can result in unsuccessful sales, business closures, and job losses.
On Wednesday, the Fed increased interest rates by 25 basis points, bringing the target range to 3.75%-4.00%. Officials also indicated that there could be another rate increase within the year.
Zandi described the likelihood of a “serious Fed policy mistake” as “uncomfortably high and rising.”
His reasoning is straightforward. Energy costs and tariffs are partly pushing inflation above 3%. Raising interest rates will not generate more crude or eliminate tariffs. It will however raise the cost of borrowing and slow down hiring.
AI investment complicates the policy trade-off. According to Zandi, the Fed might need to either dampen the AI boom or apply more pressure to weaker economic sectors to bring inflation down.
The odds of a serious Fed policy mistake are uncomfortably high and rising. Markets are all but certain the Fed will raise rates a quarter point at next week’s meeting, and are pricing in more to come. But the economy is already growing near potential (2% real GDP growth) and…
— Mark Zandi (@Markzandi) September 13, 2026
Both sets of warnings highlight the risk of concentrated exposure.
Investors with significant exposure to US growth, AI equities, and readily available credit may see steeper losses if rising interest rates reveal vulnerabilities in other areas. Dimon's caution adds a more gradual issue: millions of firms are approaching ownership changes without adequate preparation.
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Fidelity's Jurrien Timmer questions the 60/40 portfolio comeback as higher Treasury yields sustain a positive stock-bond correlation.
The Bank of England is expected to raise Bank Rate to 4% on Thursday, its first hike of this cycle, with inflation at 3.5%.
Japan's services PMI rose to 51.7 in October, but the composite PMI slipped to 52.1, a five-month low, as hiring slowed and cost pressures persisted.
September data showed Australia's goods surplus at about A$2.8 billion, a seven-month peak, with LNG and metals exports up and gold imports down sharply.