NFFS January 2026 Economic Advisor Newsletter Now Available!

A Closer Look: The U.S. Economy - Understanding Interest Rates: What the Bond Market Is Telling Us
by David Fairchild, ITR Economics

While the Fed can influence short-term rates, long-term rates show signs
of stickiness due to bond market expectations. 

Interest rates are often discussed as if they are a single number. In reality, rates represent a signaling system — a complex one at that — about risk, growth, inflation, and economic confidence. For business leaders, understanding how those signals interact is critical.

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Also in this month's Advisor:

• ITR's Macroeconomic Outlook:  "We are entering the new year with generally well-positioned consumers, rising business-to-business spending, and an expanding industrial sector... 
• Make Your Move:  "Despite recent geopolitical and domestic developments, the data continues to support our outlook for growth...
• Investor Update:  "The S&P 500 posted a double-digit rate of growth for 2025 as a whole, the third straight year this has occurred... 
• ITR Economics' Long Term View:  "2026 - Growth,  2027 - GDP Growth; Manuf. Flat, 2028 - Growth"
• Leading Indicator Snapshot: "ITR Leading Indicator™ signals remain somewhat mixed; however, economic evidence is pointing toward mild rise.... 
• Manufacturing Industry Analysis:  "Annual US total Manufacturing production in December was 1.2% above the year-ago level... 
• State-by-State: PERMITS:  "Annual US Housing Permits in October were 2.4% below the year-ago level...
• Reader's Forum:  "Will the weakening labor market lead to a recession?"  Haley Sienkiewicz, Economist at ITR Economics™, answers: