Show Notes
Episode Date: October 30, 2026 Host: Byron Earnheart Guest: Jim Reber, The Baker Group
Episode Summary
The Fed held on Wednesday. Thursday’s numbers said it isn’t finished. Jim Reber walks through the October 28 meeting, the two votes for a hike, September’s inflation reading and the first look at third-quarter GDP, then where that leaves Treasury yields.
Key Points
A hold, with two votes to hike: The FOMC kept the fed funds target at 3.75% to 4% in a 10–2 vote. Cleveland Fed President Beth Hammack and Governor Lisa Cook dissented in favor of a quarter-point increase. The market expected the hold and barely moved.
Fewer policy meetings, starting in 2027: Chairman Warsh said one of the Fed’s eight meetings in 2027 will go to strategic planning, with no policy change on the table. In 2028 it will be two. Reber notes that doesn’t rule out emergency meetings. The Fed called them at the start of the financial crisis and again at the start of COVID.
What the market is pricing: As of recording, Reber puts the odds of a quarter-point hike at the December 9 meeting near 72%. January is the first meeting the market fully prices one. By the end of 2027 it expects two more increases, with the overnight rate around 4.5%.
Inflation is moving the wrong way: Core PCE, the Fed’s preferred gauge, rose to 3.1% in September from 3.0%. Headline came in at 3.6%. Inflation isn’t just stuck, Reber says. There is “still work to be done on the inflation front.”
GDP was a head fake: The first estimate of third-quarter GDP was 3.4%, up from 2.2% in the second quarter. Reber’s read: much of it came from inventory building, which doesn’t last, and from consumers spending faster than their income grew. That means more debt. Two revisions are still to come, in November and December.
Where Rates Sit
The 10-year Treasury was pushing 5.30% at the end of September and sat near 4.90% at recording. The short end is down about 25 basis points. Reber expects a modest increase in fed funds and Treasury yields near where they are now. With rates near a 20-year high by his count, he suggests listeners so inclined might think about a purchase or two.
Market commentary for educational purposes, not investment advice.
About the Guest
Jim Reber joined The Baker Group in 2026 after more than 30 years at ICBA Securities, the last two decades as president and CEO. The Baker Group is now ICBA Securities’ endorsed broker-dealer. He spends much of the year at state association conventions, sits on the Barret School of Banking Board of Regents, and teaches investment management on the Barret faculty.
About the Host
Byron Earnheart is Programming Director for the Barret School of Banking in Memphis, TN and hosts Main Street Banking, the only podcast solely devoted to community banks. He brings 15+ years of financial services experience, including 11 years in banking in roles ranging from teller to branch management. Outside work he plays guitar and sings with Delta Heart, writes music, cooks, and reads.
Contact Information
Barret School of Banking · 650 East Parkway South, Memphis, TN 38104 · (901) 321-4000 · barret@barretbanking.org