November 2025 Commentary And Economic Outlook

Infrastructure Capital Advisors, led by CEO/CIO Jay Hatfield, expects the Fed to pause at its next meeting—blaming what it calls a flawed monetary framework with an arbitrarily low target, unadjusted price indices and reliance on Keynesian models—and projects the S&P 500 at 7,000 for 2025 and 7,900 for 2026, each reflecting a 23x 2026 EPS multiple. The firm lowered its 2025 oil forecast to $70 from $80, arguing President Trump will use influence with Saudi Arabia and Russia to limit price increases despite tighter Iran sanctions. Taken together, the call implies continued equity upside under a policy pause and reduced energy-driven inflation risk, though outcomes depend on political dynamics and the firms' valuation assumptions.

Analysis

Infrastructure Capital Advisors, led by Jay Hatfield, argues the Federal Reserve will pause at its next meeting, criticizing the Fed's monetary framework as using an arbitrarily low target, failing to adjust price indices for anomalies, and relying on flawed Keynesian models. The firm projects the S&P 500 at 7,000 for 2025 and 7,900 for 2026, each based on a 23x multiple of 2026 S&P EPS, explicitly embedding a high-valuation assumption into its outlook.

The firm lowered its 2025 oil forecast from $80 to $70, citing an expectation that President Trump will leverage influence with Saudi Arabia and Russia to cap price increases despite tighter sanctions on Iran, a call that implies lower energy-driven inflation risks in their base case. A Fed pause combined with softer oil prices is the central rationale supporting the bullish equity targets and the mild positive sentiment attached to the call.

Key risks are valuation and political execution: the 23x multiple is aggressive and outcomes depend on the durability of coordinated producer discipline and the unpredictable impact of sanctions on supply. Income-focused strategies run by InfraCap (tickers SCAP, ICAP, AMZA, PFFA, PFFR) may benefit from a pause, but positions remain vulnerable to reversal if Fed guidance or geopolitical developments change materially.

Key Decisions for Investors

• Consider modestly increasing U.S. equity exposure if you concur with a near-term Fed pause and the disinflationary oil view, but size positions conservatively given the aggressive 23x valuation assumption
• Reduce or hedge direct oil and energy sector exposure in anticipation of lower 2025 oil prices to $70 per InfraCap's call, while keeping conviction size small because sanctions or supply shocks could reverse the trend
• Evaluate selective allocations to InfraCap's income-focused ETFs (SCAP, ICAP, AMZA, PFFA, PFFR) for yield exposure under a policy pause, but monitor fund-specific risks such as MLP and preferred security sensitivities
• Monitor three near-term catalysts—Fed meeting language, Saudi/Russia coordination on output, and Iran sanctions enforcement—and be prepared to reprice positions quickly if any of these developments diverge from InfraCap's base case