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Inflation, Rate Cuts, AI Investing & the M&A Boom Ahead

May 15, 2026

Video Transcript

For her take on today's tape and much more, let's welcome in our longtime friend Dena Jalbert, CEO of Align Advisory Services.

Very grateful for your time here today.

My pleasure.

First time you and I are talking though after a much hotter than expected CPI and PPI inflation print earlier this week.

Does that change the trajectory of the interest rate cut story this year?

I think so.

I mean, I think those numbers were disappointing to a lot of folks.

And so by virtue. that there's going to have to be some sort of correction, and I think with the new Fed chairman coming it's probably on its way, so we'll see when, but I think it's going to open up a lot of money and there's going to be a lot of activity.

Dina, we know that CEOs inherently, they could be a bit more bearish than a lot of other analysts on Wall Street, people like Jamie Dimon in particular.

Do you get the sense that CEOs are increasingly a bit more concerned about where the economy is right now?

I think you're largely Cap, uh, CEOs are, um, because credit is still expensive and there's a lot of, uh, global uncertainty and macro, um, volatility, so volatility breeds apprehension and those CEOs, I think, are gonna step back and, and not invest as much, um, and, uh, we're gonna see returns down, but I think where you're going to actually see that money shift to is your middle market, and that's actually gonna grow because they're gonna feed the acquisition upswing that those larger businesses are gonna have.

Have in order to grow because it's easier to buy it than build it.

What have you seen with regards to M&A activity and are we set for an even furtherance of a rebound for M&A activity for the back half of 2026?

Yes, definitely.

I think there's a lot of pent up demand by buyers, both corporate and private and financial buyers.

I think there's a tremendous amount of backlog, but I think also we're going to see a lot of sellers more willing in the second half this year than they have been.

In the last even 6 to 12 months, again, I think they were sitting on the sidelines worried about all this volatility.

I think they've seen what it is or isn't going to do to their balance sheets, and now they're ready to plow ahead.

They can't continue to sit and wait much longer.

So I think you're going to see the gap and the bridge between seller expectation and buyer appetite start to converge.

I want to get your take on software stocks.

You and I are taking a look here.

Pretty strong, all things considered crowd.

Clare CrowdStrike, Data Dog, and Snowflake are down for the day, but more broadly, what do you make of the Sas apocalypse conversation?

Is it real or just maybe a little bit of a reset for the software stocks?

I think it's going to be more of a reset.

I think it is the age-old nice to haves versus need to haves.

And so I think the softwares that really bring efficiency and operational scale are the ones that are going to come through OK.

I think the ones that are the nice to haves that.

Don't deliver that scale operationally are going to be the ones that are going to struggle a little bit.

We're also talking about some potential mega IPOs.

There was a big one today elsewhere here on Wall Street.

What are you eyeing in terms of a name like SpaceX?

What does that mean for the state of the private market?

Yes, I mean the private markets have been thirsting to have a place to put AI infrastructure.

Investment and they got one today, right?

So uh I think it just shows the thirst and the desire to for institutional investors and retail investors alike to invest in that sector and I think you're also going to see the the downstream effect of that cybersecurity, IT, AI, government, you know, aerospace and defense.

It's all interrelated.

In these organizations, it's not just space or just AI or just tech.

I think you're going to see this whole ecosystem have a similar round of investment like we saw today.

Yes, maybe a bit of a restarting for risk appetite for retail and institutional investors alike.

I could chat with you all show unfortunately that's all the time I have.

Please come back and see us again soon.

It's for having me.

Inaper of Align Advisory Services.

Dena Jalbert, CEO of Align Advisory Services, joined in to break down the latest inflation data, the outlook for interest rates, M&A activity, software stocks, and the growing appetite for AI investments across both public and private markets. Following hotter-than-expected CPI and PPI inflation readings this week, Jalbert said the data likely complicates the Federal Reserve’s rate cut trajectory for 2026. While investors were hoping for clearer signs of easing inflation, she believes the recent numbers may delay policy changes, though a market correction and leadership changes at the Fed could eventually unlock significant capital and investment activity later this year.

Jalbert also noted that many corporate CEOs remain cautious amid high borrowing costs, global uncertainty, and macroeconomic volatility. According to her, large-cap companies are likely to stay conservative with spending and investment decisions in the near term, but that hesitation could fuel growth opportunities in the middle market. She expects increased acquisition activity as larger companies look to buy growth instead of building it internally, creating favorable conditions for middle-market businesses and dealmaking.

On mergers and acquisitions, Jalbert said there is substantial pent-up demand from both corporate buyers and private equity firms, with many sellers finally preparing to re-enter the market after sitting on the sidelines during periods of uncertainty. She expects buyer appetite and seller expectations to align more closely in the second half of 2026, potentially driving a major rebound in M&A activity across sectors.

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