We resolve to watch these 2026 indicators

And our producer, Cooper Katz McKim.

Hello. Great to meet you.

Come here.

It's like we had a little break for the holidays and you just forgot who we were.

Colleague Waylon.

And just to catch you up from what you might have missed, we had a family feud situation here at the Indicator. It featured our very own Darian Woods. And then Planet Money's Greg Rosalski and Kenny Malone. And these guys battled over which indicator best represented 2025.

Flying cars, karate kicking robots, guaranteed. Today on the show, we'll bring you three indicators that could shape 2026.

The indicator I'll be watching in 2026 is, is the federal funds rate, aka the Federal Reserve's benchmark interest rate. So right now, the rate is between 3 and a half and 3.75%. The Fed, you might remember, did three consecutive rate cuts at the end of last year. And these are not unanimous decisions. You are seeing some divisions within the Fed about what to do on interest rates. So my indicator is really about the future of the Fed and how it's going to make decisions this year.

It is. And we had some close calls in 2025 where we thought maybe President Trump was going to fire Jerome Powell. That didn't end up happening. But Fed independence is still a really big story. So Powell's term as Fed Chair ends in May. The President has been very clear about how he wants lower interest rates. And then he said on Truth Social just before Christmas, and anybody that disagrees with me will never be the Fed chairman.

Yeah, and the Supreme Court will actually hear arguments in the Lisa Cook case early this year. But you can already see tensions in the committee from the last few interest rate decisions. Like in December, two members of the committee voted for no cut, and then one wanted a bigger reduction in rates.

Yeah. And so the Fed would have a pretty tricky job even without this added pressure from the President. And that is why I think interest rates and the Fed will be the economic story to watch in 2026.

Yeah.

Oh, I think my bill's already been up this last year.

Oi. Okay, so 7% compared with, you know, just under 3% for general inflation. So does this have something to do with AI and data centers?

I knew it.

12%. So that's even more than the 7% you cited earlier.

But this can't be just about AI, right? I mean, I can think of maybe some other factors, like an aging power grid infrastructure that needs replacing.

Not consumer sentiment, huh? I feel like we've been obsessed with consumer sentiment, but this is a little twist.

And so that top 10% is basically anyone who makes around $200,000 or more a year, Right?

The thing is that below that 10% are a lot of signs that show reduced consumer confidence. Like, you know, you look at auto loan delinquencies, credit card debt, these are both at record highs.

Sounds a lot like trickle down economics. Interesting.

It's gonna be fine. It's gonna trickle down. It's gonna trickle down.