Economic Update 10/28/2026
5 Key Takeaways
· September Durable Good Orders increased by 1.8%.
· Mortgage applications for last week saw a gain of 3.4% from the previous week.
· The Fed announced they will keep the Funds Rate unchanged.
· There are strong indications that rates will likely rise following their next meeting in December.
· We will continue to maintain our equity holdings and add to positions where appropriate.
This morning we saw an encouraging rise in Durable Goods Orders for the month of September. During this month, the increase was 1.8%. This compares very favorably to the August gain of 0.1% and the forecasted level of 1.5%. This is also the second-highest rise in Durable Goods Orders for the year. What is especially important is that this indicates gains in the manufacturing sector on a domestic basis. Transportation equipment was the strongest area in manufacturing, with orders up 4.6%. Even excluding transportation, orders were up 0.5% during September. This also compares favorably to the August level of 0.3%.
Mortgage Application Gains
While this week has been somewhat slow in economic releases, one more indicator was encouraging. Mortgage applications for last week saw a gain of 3.4% from the previous week. Interest rates have declined slightly, and this resulted in a somewhat lower mortgage rate. This was the strongest week since mid-June. Again, we will need to see this trend continue before we can feel a real change has occurred.
Funds Rate Remains Unchanged
Most importantly, and the primary reason for this update, the Fed had their October meeting yesterday and today and just announced they will keep The Funds Rate unchanged. While this was expected, given the Fed's long-standing position not to be an influencing factor as the mid-term elections are next week, they did give a strong indication rates will likely rise following their next meeting in December. We have suggested in our recent updates that another rate increase would happen before year-end.
Remember, the first rate increase for the year occurred last month. The discussion released by the Fed suggested the economy is growing stronger, but prices are still somewhat higher than targeted levels. Fed Chairman Warsh suggested in his remarks that the committee felt additional time was needed to determine their next move.
Looking Forward
My attention will be focused tomorrow on the initial report for third quarter growth. From an investment perspective, we will continue to maintain our equity holdings and add to positions where appropriate. I am also continuing to add fixed-income positions as we feel interest rates have either peaked or close to it.
A Boo-Tiful Husker Win on the Horizon?
Hopefully, everyone enjoys the upcoming Halloween holiday. Get your little kids or grandchildren dressed appropriately and get out to gather candy and see others in your neighborhood also celebrate this special time. However, don't forget the key Husker football game against Washington. We need the win following two close losses. GBR!!
