Dear Reader,
We’re not heading into 2026 with a mystery economy. We’re heading in with one shaped by a long stretch of higher rates, inflation that’s cooled but not disappeared, and a consumer who’s held up longer than many forecasts suggested.
The right question now isn’t “What’s the market going to do next week?” It’s “What conditions are already in place—and how should a household investor respond?”
After declining sales, Trump's threats, and a 45% stock plunge…
Tesla just roared back to positive territory.
And mark my words, this is just the beginning.
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We're looking at a wealth creation event 14x bigger than the ChatGPT boom.
Why This Matters
Inflation is lower than it was, but it’s still part of everyday life. The U.S. Bureau of Labor Statistics reported that the Consumer Price Index rose 2.7% over the past 12 months in its November 2025 release, with key categories still moving unevenly.
Interest rates remain high because the Federal Reserve is still guarding its inflation progress. In the December 10, 2025 policy statement, the Fed emphasized that decisions will depend on incoming data and the balance of risks.
For households, that means borrowing costs still bite. For savers, it means cash and high-quality bonds can finally pay you something again—without chasing speculative risk.
Consumer confidence is the other piece investors can’t ignore. Reuters reported that the Conference Board’s consumer confidence index fell in December, reflecting growing worries about jobs and income even as spending has held up.
Where Things Stand
This is an economy that looks steadier than the headlines suggest—but tighter than many people feel comfortable admitting.
The Fed is no longer in “emergency mode,” but it’s also not declaring victory. Reuters described a more divided policy backdrop around the December meeting, with inflation risks still a key reason officials are wary of moving too quickly.
Meanwhile, market interest rates remain meaningfully elevated, which changes the math for mortgages, business loans, and valuation assumptions across stocks. The Fed’s own daily rate series continues to show that “normal” today is simply higher than it was in the 2010s.
Where Things Stand
This is an economy that looks steadier than the headlines suggest—but tighter than many people feel comfortable admitting.
The Fed is no longer in “emergency mode,” but it’s also not declaring victory. Reuters described a more divided policy backdrop around the December meeting, with inflation risks still a key reason officials are wary of moving too quickly.
Meanwhile, market interest rates remain meaningfully elevated, which changes the math for mortgages, business loans, and valuation assumptions across stocks. The Fed’s own daily rate series continues to show that “normal” today is simply higher than it was in the 2010s.
The Patriot Perspective
A cooling inflation trend and a still-functioning labor market are positives—but “better” is not the same as “easy.”
For investors, this means leaning on fundamentals: strong balance sheets, reliable cash flow, and sensible diversification. In a higher-rate world, discipline isn’t old-fashioned—it’s a competitive advantage.
Stay steady,
Kenneth Boyd
Author, Finance Writer, Former Investment Advisor & CPA