The Quarterly Economic Outlook for Equipment Finance

Um, to get us started, Tim, can you set the stage for us with some high-level updates perhaps that have happened in the last few weeks since the latest economic outlook was published?

Oh, man, what day of the week is it?

[laughs]

I feel like we've fl- we're flying around.

2026, and we talked about this last time, 2026 has been a fast-moving year.

Um, and so for those of you who don't remember, um, all the way back in July, which was just a few months ago, we had a Fed that was saying, "Hey, we're not sure that we're gonna need to raise rates.

Maybe." And by the time we got to September, uh, they were like, "We're definitely raising rates probably a few times." And so we've had a lot of movement in terms of what the, what monetary policy has sounded like over the last few months.

And so really it's interesting though because the data hasn't changed as much as perhaps the communication or in the Fed has changed.

So really we had some good inflation data over the second half of the summer, uh, and then some somewhat worrying inflation data at the, at early fall, end of the summer, early fall.

But the Fed sounds very much like they're gonna keep hiking.

So markets are looking at, like, at least one, maybe two more hikes this year, so it's in the Fed futures markets.

Um, so it feels like a lot's going on.

That's not unexpected from when we cut our forecast in early August, when we cut our economic outlook.

We had, uh, uh, a Fed that was holding because inflation was looking good.

But I also think perhaps there's a little bit of overdoing it on where the Fed's gonna go.

Uh, and so there's a lot to talk about.

But basically we've had some, um, treasury market issues, we had some fluctuating treasury markets.

Yields are going a lot higher, particularly at the long end.

Uh, expectations are being reset, and everyone's now worried about inflation.

Although I will say today, and I would expect over the next couple of weeks, oil prices are starting to look like they're coming down.

So some disinfla- some potentially some disinflationary pressure in the pipeline.

So who knows? Ups and downs for 2026.

I would say the key for today, as we've been talking about, I know we're gonna talk a lot about this, is volatility.

This is where we are now, right? Up, down, up, down, up, down.

And I'm so glad to have James here because he's actually lived the life of someone that isn't an economist who just makes up numbers in the background.