We resolve to watch these 2026 indicators

Summary

Podcast Summary: The Indicator from Planet Money

Episode: We resolve to watch these 2026 indicators
Air Date: January 2, 2026
Hosts: Waylon Wong, Stephen Pisaha, Cooper Katz McKim

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Overview:

In this kickoff episode for 2026, the Indicator team picks three key economic data points—or “indicators”—to keep a close eye on throughout the year. Building on the prior episode’s lively debate about which indicator best captured 2025, the hosts look forward, each selecting what they believe will most shape the economic story in the months ahead. Their choices reflect ongoing shifts in interest rates, affordability issues (especially electricity costs), and the evolving nature of consumer spending.

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Key Discussion Points & Insights

1. Recap of "Indicator of the Year 2025"

• The team humorously recalls a recent episode where Darian Woods, Greg Rosalski, and Kenny Malone debated which economic indicator best represented 2025.
  • Darian advocated for the Cape ratio in a Dracula costume, Kenny for consumer sentiment, and Greg for tariffs.
  • Listener votes determined the winner—and “tariffs” edged out by just five votes.
  • Quote: “The indicator of the year chosen by you, the listener, was tariffs by just five votes. Congratulations to one Greg Wazalski…” (Stephen, 01:02)

2. Indicator #1: The Federal Funds Rate & Federal Reserve Decisions

• Selected by: Waylon Wong
• Timestamps: 02:46–04:53
• 2026 will see the end of Jerome Powell’s term as Fed Chair (scheduled for May), with renewed political pressure on the Federal Reserve’s independence.
• President Trump has been public about wanting lower interest rates—and suggested on Truth Social that “anybody that disagrees with me will never be the Fed chairman.” (03:48)
• There are ongoing divisions within the Federal Reserve regarding rate cuts.
• Supreme Court is set to hear arguments about the attempted firing of Fed Governor Lisa Cook, reflecting broader tensions.
• Unemployment and GDP data are sending mixed signals, and high inflation remains a concern.
  • Quote: “The Fed would have a pretty tricky job even without this added pressure from the President.” (Waylon, 04:41)
• Why it matters: “That is why I think interest rates and the Fed will be the economic story to watch in 2026.” (Waylon, 04:53)

3. Indicator #2: Electricity Rates & Affordability

• Selected by: Stephen Pisaha
• Timestamps: 04:56–06:52
• While other affordability metrics (like food and housing) are calming down, electricity prices climbed nearly 7%—outpacing overall inflation, which is under 3%.
  • Quote: “For a long time, electric rates in the US have pretty stable for like, 20ish years, but recently… electric prices have jumped about 7%.” (Stephen, 05:23)
• Primary factor: surging demand from AI and data centers, which need massive amounts of power.
  • Quote: “The data centers that power AI need a lot of, you know, power. And that extra demand is leading to higher electric rates.” (Stephen, 06:12)
• Additional pressures stem from grid infrastructure needs and increased costs from climate-related natural disasters (like wildfires).
• Households that use electricity for heating could see costs jump by about 12% this winter.
• Why it matters: All factors suggest that rising electricity rates will remain a key affordability challenge in 2026.

4. Indicator #3: Consumer Spending & the Resilient “Top 10%”

• Selected by: Cooper Katz McKim
• Timestamps: 07:05–08:56
• 2025 saw consumer spending remain strong despite historically poor consumer sentiment (down 30% year-over-year).
• The “top 10%” of households, earning $200,000 or more, are driving much of this spending, masking the struggles of lower-income groups.
  • Quote: “Just the top 10% of consumers account for a near majority of consumer spending, according to global bank RBC.” (Cooper, 07:41)
  • “Yeah, there is that K shape economy coming on back for us.” (Stephen, 07:56)
• These high earners benefit from both labor income and accruing gains from rising home values and a strong stock market.
• At the same time, “auto loan delinquencies [and] credit card debt…are both at record highs.” (Waylon, 08:09)
• The episode questions whether this spending at the top can “keep the good times rolling,” with the answer hinging on continued stock market strength and favorable tax policy.
  • Quote: “A stock market correction would be bad for consumer spending no matter what. But right now it would have a particularly big impact.” (Cooper, 08:46)
• The metaphor of “trickle-down economics” is discussed wryly as the hosts wonder how sustainable this trend is.
  • Quote: “It’s going to be fine. It’s going to trickle down. It’s going to trickle down.” (Waylon, 09:02)
  • “I’ll have my cup out and ready.” (Stephen, 09:04)

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Notable Quotes & Memorable Moments

• “Flying cars, karate kicking robots, guaranteed. Today on the show, we’ll bring you three indicators that could shape 2026.”
  — Waylon Wong (01:38)
• “2025 felt like this really big year for the Fed and feels like 2026 could be even bigger. I mean, it is the end of the Jerome Powell era.”
  — Stephen Pisaha (03:25)
• “Almost certainly, yeah. I mean, for a long time, electric rates in the US have pretty stable for like, 20ish years. But recently…electric prices have jumped about 7%.”
  — Stephen Pisaha (05:23)
• “So just the top 10% of consumers account for a near majority of consumer spending, according to global bank RBC.”
  — Cooper Katz McKim (07:41)
• “Yeah, there is that K shape economy coming on back for us.”
  — Stephen Pisaha (07:56)
• “It’s going to be fine. It’s going to trickle down. It’s going to trickle down.”
  — Waylon Wong (09:02)

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Timestamps for Key Segments

• Introduction & “Indicator of 2025” Recap: 00:12–01:38
• Indicator #1: Federal Funds Rate: 02:46–04:53
• Indicator #2: Electricity Rates: 04:56–06:52
• Indicator #3: Consumer Spending: 07:05–08:56
• Hosts’ Closing Remarks: 08:56–09:18

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Tone & Style

Light-hearted, punchy, and conversational, as is classic for The Indicator. The hosts blend humor (references to flying cars and “New Zealand Dracula”) with clear economic explanations and a focus on the practical impact of these trends for listeners in 2026.

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For Listeners Who Missed the Episode

This episode highlights three major economic signposts for 2026: how the Fed will navigate interest rates under new leadership and political pressure, why electricity bills may keep rising (hint: AI is only part of the story), and how “K-shaped” consumer spending could shape the economy—especially if the top 10% falter. The hosts’ friendly rivalry, memorable quotes, and real-world data make for a lively, quick listen packed with insight.

Transcript

[A]

Npr.

[B]

This is the Indicator from Planet Money. I'm Waylon Wong and I'm joined today by Stephen Pisaha.

[C]

Greetings, Waylon.

[B]

And our producer, Cooper Katz McKim.

[A]

Hi. Hello. Great to meet you.

[B]

Hello. Great to meet you.

[A]

Day one.

[B]

Come here.

[C]

All day.

[B]

It's like we had a little break for the holidays and you just forgot who we were.

[C]

Exactly.

[B]

Colleague Waylon.

[A]

Oh, okay.

[B]

And just to catch you up from what you might have missed, we had a family feud situation here at the Indicator. It featured our very own Darian Woods. And then Planet Money's Greg Rosalski and Kenny Malone. And these guys battled over which indicator best represented 2025.

[A]

Kenny chose consumer sentiment. Greg argued tariffs were king. And Darian made a convincing case for the Cape ratio in a Dracula costume.

[C]

We have counted up your votes. And drumroll, please. The indicator of the year chosen by you, the listener, was tariffs by just five votes. Congratulations to one Greg Wazalski for successfully arguing that tariffs were the indicator of the year in 2025.

[A]

You know, I think Darian should have done just a little more New Zealand Dracula and he would have got there. Hey, Matio. We're not here to discuss the past, though we want to what's going to happen in the future.

[B]

Flying cars, karate kicking robots, guaranteed. Today on the show, we'll bring you three indicators that could shape 2026.

[C]

Stay with us after the break. Support for NPR and the following message come from Edward Jones. What does it mean to live a rich life? Maybe it's full of brave first leaps, tearful goodbyes, and everything in between. And with over 100 years of experience, your Edward Jones financial advisor can help. Edward Jones, Member, SIPC this message comes from.

[B]

BetterHelp. President Fernando Madera shares BetterHelp's commitment to expanding access to therapy. Our State of Stigma report helped us.

[A]

Understand that believing in mental health is.

[B]

Easy, but asking for help is not. Now, with the report on our hands, we can work to make mental health care more accessible. To get matched with a therapist, visit betterhelp.com NPR for 10% off your first month.

[C]

Okay, Waylon, you are first. What is your indicator of the future?

[B]

Ooh, the indicator I'll be watching in 2026 is the federal funds rate, aka the Federal Reserve's benchmark interest. So right now, the rate is between 3 and a half and 3.75%. The Fed, you might remember, did three consecutive rate cuts at the end of last year, and these were not unanimous decisions. You are seeing some divisions within the Fed about what to do on Interest rates. So my indicator is really about the future of the Fed and how it's going to make decisions this year.

[C]

Yeah, 2025 felt like this really big year for the Fed and feels like 2026 could be even bigger. I mean, it is the end of the Jerome Powell era.

[B]

It is. And we had some close calls in 2025 where we thought maybe President Trump was going to fire Jerome Powell. That didn't end up happening. But Fed independence is still a really big story. So Powell's term as Fed Chair ends in May. The President has been very clear about how he wants lower interest rates. And then he said on Truth Social just before Christmas, anybody that disagrees with me will never be the Fed chairman.

[A]

So we will most likely get a Trump loyalist as chair. The President wants more allies on the committee that votes on interest rates. He already tried to fire Lisa Cook last year.

[B]

Yeah. And the Supreme Court will actually hear arguments in the Lisa Cook case early this year. But you can already see tensions in the committee from the last few interest rate decisions. Like in December, two members of the committee voted for no cut, and then one wanted a bigger reduction in rates.

[C]

Yeah, and it seems like the economic data is just really hard to parse right now. I mean, you got unemployment ticking up, but GDP growth is also looking healthy. Inflation is maybe slowing down, but it is still above the Fed's 2% target.

[A]

But also, the economic data from the end of the year got disrupted from the government shutdown.

[B]

Yeah. And so the Fed would have a pretty tricky job even without this added pressure from the President. And that is why I think interest rates and the Fed will be the economic story to watch in 2026.

[A]

Okay, Stephen, you are up.

[C]

Yes, my indicator is all about affordability, but it is a different indicator than the ones we've been, like, harping on about forever.

[A]

Okay, we talking groceries?

[B]

Yeah.

[C]

So grocery prices, they are still up, but, you know, food inflation, it is under 3% right now. There's also housing, but we have actually seen rental prices drop recently. No, my affordability indicator to watch in 2026 are electricity rates.

[B]

Oh, I think my bill's already been up this last year.

[C]

Almost certainly, yeah. I mean, for a long time, electric rates in the US have pretty stable for like, 20ish years. But recently, like you said, the cost of electricity in the US has been climbing way faster than overall inflation. Electric prices have jumped about 7%.

[B]

Oi. Okay, so 7% compared with, you know, just under 3% for general inflation. So does this have something to do with AI and data centers.

[C]

Yeah, everything has to do with Data Centers and AI in 2025 and 2026.

[B]

I knew it.

[C]

In fact, we recently did a poll, Land Money all about how AI data centers are affecting your electric bill. So you could check that out in our show notes. What you need to know now, though, is that the data centers that power AI need a lot of, you know, power. And that extra demand is leading to higher electric rates.

[A]

Yeah. And it's not like the AI race is slowing down anytime soon. So we should expect that demand and those rates to keep going up, I imagine.

[C]

Right. And again, we are already seeing rates go up. If you use electricity to heat your home, you could expect that cost to jump by about 12% this winter. That is, according to the National Energy Assistance Directors Association.

[B]

12%. So that's even more than the 7% you cited earlier.

[C]

Yeah, it is not pretty.

[B]

But this can't be just about AI, right? I mean, I can think of maybe some other factors, like an aging power grid infrastructure that needs replacing.

[A]

States like California have been dealing with natural disasters like wildfires, and that's meant spending more money on repairing lines.

[C]

Yes. And all these factors are why I predict electric rates are going to keep climbing and why this is my indicator to watch for 2026. Okay, Cooper, your turn. What is your indicator?

[A]

Okay, my indicator to watch this year is consumer spending. Oh.

[B]

Not consumer sentiment. I feel like we've been obsessed with consumer sentiment, but this is a little twist.

[A]

I know. Sorry to Kenny. Don't want to put salt in the wound.

[C]

Rub it in.

[A]

But yeah, hard data shows the American consumer has actually been resilient in 2025, which is confusing because as we've heard, consumer sentiment has been pretty bad. It sits 30% below sentiment in December of 2024 this time last year.

[C]

Yeah. And if I got it right, you know, like the highest rollers are spending so much, it's basically hiding the difficulties of everyone else.

[A]

Yeah. So just the top 10% of consumers account for a near majority of consumer spending, according to global bank RBC.

[B]

And so that top 10% is basically anyone who makes around $200,000 or more a year, Right?

[A]

Exactly.

[C]

Yeah, there is that K shape economy coming on back for us.

[A]

Y and they're making money not just from working, but through assets that accrue value on their own. So these high income earners are benefiting from their home values going up and a thriving stock market.

[B]

The thing is that below that 10% are a lot of signs that show reduced consumer confidence. Like you know, you look at auto loan delinquencies, credit card debt, these are both at record highs.

[A]

So the question is, can this overly powerful 10% keep the good times rolling into 2026? RBC, this global bank argues yes. They say, look, President Trump's tax cuts through the one big beautiful bill will keep benefiting upper income households. And as long as the stock market keeps on, they'll keep soaking in those dividends.

[C]

So basically, consumer spending is hinging on the market staying strong.

[A]

It's at least a big part of it. A stock market correction would be bad for consumer spending no matter what. But right now it would have a particularly big impact.

[B]

Sounds a lot like trickle down economics. Interesting.

[C]

Yeah, it feels like I'm rooting for all that spending right now.

[B]

It's going to be fine. It's going to trickle down. It's going to trickle down.

[C]

I'll have my cup out and ready.

[A]

Just keep the water metaphors rolling.

[C]

We will keep the flow going far into 2026. You know, we're excited to deliver economic stories and news for you for the rest of the year.

[A]

This episode of the Indicator was produced by Angel Carreras with engineering by Robert Rodriguez. It was fact checked by Cierra Juarez. Julia Ritchie edited this episode. Cake and Cannon edits the show and the indicators of production of NPR.