Weekly CIO commentary

Building on the power of diversification with listed infrastructure Saira Malik, CFA Chief Investment Officer

Bottom line up top On behalf of Nuveen’s Global Markets recalibrate in the Warsh era. Equity investors can be certain of Investment Committee uncertainty heading into this week’s U.S. Federal Reserve meeting, the second under new Fed Chair Kevin Warsh. His first was notable for rhetoric that both As Nuveen’s Chief Investment expressly prioritized price stability over full employment and declared that forward Officer and leader of guidance was being eliminated from the central bank’s policy statements. The our Global Investment lack of telegraphed policy decisions may pose a challenge for prognosticators but Committee, Saira drives won’t stop markets from calibrating, and recalibrating, their expectations. Market market and investment odds are close to 90% that the Fed will hike rates in 2026 (Figure 1). Of potentially insights, delivers client asset greater consequence are looming shifts in the Fed’s overall policy framework. allocation views and brings Five newly formed task forces are actively reviewing Fed operations, focused on together the firm’s most communications, the balance sheet, data use, productivity and inflation, with senior investment leaders to findings expected by year-end. The transition to a Fed that is more data- and deliver our best thinking and principle-driven on the one hand and less predictable on the other should make this actionable investment ideas. week’s Fed meeting the center of attention for investors. In addition, she is a portfolio manager for several key Complexity could create opportunity. The Fed transition is unfolding investment strategies. against a backdrop of elevated structural risk: Per Deutsche Bank, margin debt for the New York Stock Exchange has increased 136% since October 2023, making valuations more sensitive to hawkish policy surprises. At the same time, geopolitical disruptions, particularly involving energy supply routes, have kept oil prices elevated and introduced a stagflationary dimension to the macro outlook — simultaneously hampering demand growth in the economy while putting upward pressure on inflation through higher energy and logistics costs.

That said, history offers a somewhat reassuring perspective: Strategas Research shows that oil prices have tended to revert toward pre-conflict levels within roughly 65 to 250 days following geopolitical shocks, and equity markets have generally recovered over a one-year horizon after periods of military conflict. If geopolitical tensions and energy prices were to moderate meaningfully, the path to eventual rate cuts in early 2027 (or possibly even late 2026) could potentially reopen. This would likely serve as a tailwind for rate-sensitive asset classes, including real asset categories such as publicly listed infrastructure.

OPINION PIECE. PLEASE SEE IMPORTANT DISCLOSURES IN THE ENDNOTES. NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE

Markets expect at least one rate hike by year-end Market-implied odds (%) for various rate-hiking scenarios

40 37.4% Forecasting Fed 33.6% decisions has 30 become more complicated: Currently, 20 16.7% the odds of higher rates are 9.6% 10 growing, but that 2.6% could change 0 quickly. No hikes One hike Two hikes Three hikes Four hikes ( ) Number of rate hikes and target rate in bps

Data source: CME FedWatch. Bars reflect the market-implied probabilities of each scenario as of 22 Jul 2026. Hikes are assumed to be 25 bps each.

Portfolio considerations The case for listed infrastructure, especially in the utilities sector, is being galvanized by the AI boom and the energy required to power AI expansion. That power can’t be delivered without the regulated infrastructure that generates and transmits it. While data centers can be built in 12 to 36 months, transmission upgrades and added capacity generation operate on significantly longer timelines. This asymmetry creates durable scarcity value for utilities that are able to deliver capacity ahead of demand, and such value is already showing up in earnings.

Landmark power supply agreements involve billions of dollars of investment and…