Beyond the Noise - What’s Moving Markets, and What Matters

Interest rates, Fed policy, economic growth and Washington are creating headlines, and the potential for short-term market volatility. Our focus remains on separating meaningful developments from the daily noise and determining what, if anything, should influence your long-term financial and investment strategy.

What We're Watching

The economy continues to grow, although at a more moderate pace.

Higher long-term interest rates appear to reflect concerns beyond inflation, including growing U.S. debt and deficits.

The Federal Reserve’s evolving approach could result in markets reacting more quickly to new economic data.

The outcome of the upcoming midterm elections could influence tax, spending, trade and other policies over the next several years.

Our focus remains the same: separate the meaningful developments from the daily noise and determine what, if anything, should influence your long-term financial and investment strategy.

Interest Rates & What’s Driving Them

Long-term interest rates have moved higher again, with the 30-year Treasury yield near its highest level in many years.

Inflation expectations remain relatively contained, suggesting higher yields may be driven by more than inflation concerns.

Growing U.S. debt, deficits and the increasing cost of servicing that debt remain important issues to watch.

Investors may continue demanding higher yields if fiscal pressures remain elevated.

Federal Reserve: What to Watch

Fed Chairman Kevin Warsh has signaled an evolving approach to monetary policy, including greater emphasis on current economic conditions, financial markets, credit conditions and measures of money.

Reduced reliance on forward guidance could contribute to greater market sensitivity around economic data and Fed decisions.

Inflation, employment and economic growth data will remain important in determining the Fed’s next move.

The Economy: Steady, but Not Booming

Economic growth remains positive, although the overall pace appears moderate.

Business investment and durable goods activity have shown continued momentum.

Hiring has moderated, while unemployment has remained relatively stable.

Consumer spending has remained resilient, including continued activity in auto sales.

Overall, the economy appears to be slowing, but the data doesn’t currently point to a major downturn.

2026 Midterm Elections

Republicans currently control the White House and both chambers of Congress, but congressional margins remain relatively narrow.

Control of both the House and Senate will be closely watched as the November midterm elections approach.

Several key Senate races could help determine control of that chamber.

House races are also expected to be competitive, with redistricting potentially influencing a number of seats.

Why Washington Matters to Markets

Investors will be watching several major policy areas:

Federal spending, debt and deficits

Taxes and fiscal policy

Tariffs and trade

Health care and entitlement programs

Defense and foreign policy

Government funding and future debt-ceiling negotiations

If control of Congress becomes divided, major legislation may become more difficult and budget negotiations could become a greater source of uncertainty.

Author: Brian Zellers

Published on 9/2/2026

Important Disclosure:

This material is provided for informational and educational purposes only and should not be construed as personalized investment advice or a recommendation to buy or sell any security. Economic and market conditions are subject to change, and forward-looking statements reflect current views and expectations that may not materialize. Past market conditions are not indicative of future results. Econ Wealth Management does not provide tax or legal advice. You should consult your tax or legal professionals regarding their individual circumstances.