Download this week’s full edition!

We have a generally positive economic outlook entering 2026, with solid GDP growth driven by consumer spending, manageable inflation, stable employment despite modest job creation concerns, and balanced Treasury yields and credit conditions suggesting readiness for whatever challenges the year may bring.

What caught our eyes this week

The starting point for 2026

As we begin 2026, we see a supportive macro backdrop with a few big “known unknowns” that will likely set the path for the year. Top-line gross domestic product growth is back on track, up 4.3% in Q3. Notably, 2.4% of that 4.3% came from personal consumption. Inflation is still in the 2.5% to 3% range: above the Federal Reserve target but not high enough to cause too much concern. Unemployment has slowly crept up due to tepid job creation rather than increasing layoffs. The S&P 500 gained 18% in 2025. Most of that was attributed to earnings growth, leaving the forward price-to-earnings multiple near where it started the year at 22.2x. The 10-Year Treasury yield is at 4.18%, still sitting in the “new normal” range where recession and inflation or deficit risks are in balance. Credit spreads are flashing green. In general, we like what we see and expect some of the biggest question marks (e.g., labor markets) to resolve for the better in 2026. Whatever the year has in store, we’ll be ready to roll with the punches. Happy New Year!

The Known Unknowns: Unemployment rate and year-over-year Consumer Price Index

CHART OF THE WEEK: Cerity Partners, FRED, 1/5/2026. (Note: Both unemployment rate and CPI for October 2025 were unavailable due to the federal government shutdown.)

Past performance does not guarantee future results.

Please read important disclosures here.