GS Wilson weekly mash mild reaction after AI regulation hysteria

GS Wilson - weekly mash 18 Sep 2026 Mark Wilson · Goldman Sachs · Managing Director · Global Banking & Markets FICC & Equities Fri 18 Sep 2026, 1:49pm ET

Coming off last weekend’s hysteria related to possible AI regulation, it was a mild-mannered market reaction through this week—handily framed by King Charles’s sober Thursday meeting in Scotland with AI leaders (Jensen even dropped the leathers and put a tie on for it).

Given how central AI investment has been to the nominal growth and equity earnings story, it is not surprising that the market and sentiment remain highly attuned to the trajectory of AI news. However, corporate commentary as recently as Q2 results was pretty unambiguous—and so the trajectory of rates (and therefore oil) seems to be much more consequential in the short term.

Given the hawkish hike the Fed delivered, we’ve added an extra 25bps move in October (and don’t see November’s election as an impediment to a second hike; they likely would be a larger impediment to an initial hike). Nevertheless, I can’t help but get away from the idea that now is the wrong time to be most fearful of the move higher in rates: a significant move’s already occurred, we now have hikes priced far in excess of what we expect to realise, and the inflationary distribution of surprise possibility seems to skew lower given the extended duration of the Iranian conflict has still not yet catalysed a supply disruption sizeable enough for oil to break to new highs.

A few charts I’m thinking about as we continue to triangulate between stubborn inflation, higher rates and high nominal growth—and their associated impact to equity markets:

1. The 5yr return of a 10yr US nominal bond is the worst in over 120 years … (click the chart for the link to “The name is bond – rethinking duration in balanced portfolios”).

2. Although interest expense is going up, its impact on the financials of the private sector is de minimis; the same of course is not the case for public finances across the developed world (click the chart for the link to “The impact of higher interest rates on equities”).