Fed’s Third Rate Cut Leaves Mortgage Rates Little Changed
The Federal Reserve cut rates by 25 basis points this week, its third reduction since September, as policymakers try to cushion a cooling labor market without reigniting inflation. ABC News noted the cut was widely anticipated, with futures markets pricing in nearly 90% odds ahead of the decision, which helps explain why long-term rates barely budged after the announcement (third rate cut).
Where it hits. Relief will be uneven across household balance sheets. The average 30-year fixed mortgage rate is 6.22% (Freddie Mac), and experts expect little immediate change because mortgages key off longer-term rate expectations like the 10-year Treasury, not just the Fed’s overnight policy rate (30-year rate 6.22%). Credit cards are more directly tied to Fed policy. The average card APR is 19.8%, so a quarter-point cut can reduce interest costs at the margin, though it won’t feel like a reset for most borrowers (average APR 19.8%).
Why now. Policymakers are navigating a familiar trap. Inflation has been sticky while hiring has slowed. Powell signaled the Fed is “well positioned to wait and see,” and markets currently expect two more quarter-point cuts next year, not a fast easing cycle. That keeps the risk of “higher for longer” financing costs alive even as headline policy rates come down (two cuts next year).
Plan around cash flow, not forecasts. If you’re refinancing, prioritize break-even math over hoping mortgage rates suddenly follow the Fed lower. If you carry card balances, the fastest win is still paying down principal, since even “lower” APRs are starting from ~20%.
UHERO Sees Hawai‘i Mild Recession as Tourism Softens
Hawaiʻi is sliding toward a mild recession, with a weak recovery expected in 2026, according to the University of Hawaiʻi Economic Research Organization’s latest quarterly outlook. The catalyst is a tourism downturn paired with anticipated job losses, with UHERO warning that trade policy uncertainty and federal actions are key risks to the local economy (fourth quarter forecast).
Maui illustrates how uneven that slowdown looks across the islands. From January to October 2025, Maui recorded 2.07 million visitor arrivals, up 7.6% from 2024, helped by discounting and the ongoing post-wildfire return of visitors. Maui’s average daily visitor census rose to 52,389, but it remains well below 64,634 in the same period of 2022, suggesting activity is improving but not normalized (2.07 million visitors).
What’s driving the forecast. Economists pointed to external headwinds that hit spending and travel, including a record 43-day federal government shutdown that reduced demand and disrupted flights. Meanwhile, cost pressures are building. The statewide minimum wage rises from $14 to $16 in 2026, which should lift incomes for lower-wage workers but can tighten margins for tourism-linked employers already facing softer demand (43-day shutdown).
Construction is the cushion. UHERO flags construction as consistently strong, supported by housing, infrastructure needs, and major federally funded projects. On Maui, the rebuild pipeline is tangible, with 300 homes under construction in burn zones and permit values on pace to challenge the prior $450 million peak, helping offset some of the tourism drag (300 homes).
If you’re allocating capital or planning staffing in Hawaiʻi, treat 2026 as a demand-constrained year. Favor contractors and rebuild-linked businesses, and stress-test tourism exposure for both pricing power and labor costs.
China Plans 2026 Export Push With Stronger Domestic Demand
China’s leadership is signaling a two-track approach for 2026. Maintain export strength, but lean harder into domestic demand to make trade “sustainable.” Reuters reported a senior official, Han Wenxiu, said China will “expand exports while also increasing imports,” alongside measures to boost household income, raise basic pensions, and remove “unreasonable” consumption restrictions (expand exports, imports).
That messaging matters because China’s trillion-dollar trade surplus has become a flashpoint with major partners. The IMF is publicly urging Beijing to curb reliance on exports and stoke consumer demand. The political subtext is clear: if China does not adjust, trade tensions are likely to intensify as partners respond with barriers and investigations (trillion-dollar surplus).
Beijing is also trying to stamp out deflationary price wars, sometimes described domestically as “involution,” where firms compete in ways that destroy profits and reinforce weak pricing power. That connects directly to why policymakers want more consumption: without a stronger household sector, supply-heavy growth keeps pushing prices and margins down, which eventually feeds back into hiring and investment decisions (rein in price wars).
At the same time, official coverage of the Central Economic Work Conference emphasizes that 2026 kicks off the 15th Five-Year Plan and frames domestic demand as a buffer against “external uncertainties.” It also highlights that final consumption contributed 53.5% of growth in the first three quarters of 2025, a statistic designed to show momentum behind the pivot (53.5% of growth).
For global investors and operators, the near-term read is not “exports are over,” it’s “policy is trying to reduce vulnerability.” Watch for follow-through in pension outlays, consumption deregulation, and any concrete steps to cool destructive competition in key industries.
NFL Urges Congress to Rein In Sports Prediction Markets
The NFL is pushing back on the rapid spread of sports-related prediction markets, telling Congress it is “particularly troubled” by futures-style contracts offered nationwide, including in states where sports betting remains illegal. The league submitted testimony to the House Committee on Agriculture as lawmakers examine the Commodity Futures Trading Commission’s oversight role in these markets (written testimony).
The core issue is jurisdiction and guardrails. Prediction markets allow users to trade yes or no outcomes, and the NFL argues they operate outside state gambling regulators’ frameworks, which typically set limits on bet types and monitoring standards. The league also highlighted that prediction markets are available in all 50 states, while legal sportsbooks operate in 39 states plus D.C., creating a de facto national wagering venue without state-by-state controls (all 50 states).
Why it escalated now. The NFL warned volumes could eventually exceed traditional sportsbooks, raising “substantially greater” integrity risks, and cited markets that invited trading on broadcast mentions of phrases like “concussion protocol” or “roughing the passer.” That’s the kind of novelty market regulators usually scrutinize because it can incentivize manipulation or create public distrust, even if actual influence is limited (broadcast phrase trades).
Operators are contesting the framing. A Coalition for Prediction Markets told ESPN the CFTC’s anti-manipulation rules apply, arguing this is more like regulated trading than gambling. Meanwhile, traditional sportsbook brands have signaled interest in launching prediction markets, suggesting competitive pressure is also a driver, not just integrity concerns (coalition response).
If you’re involved in gaming, exchanges, or sports media, expect a regulatory and legal squeeze. The likely next step is clearer CFTC guidance or Congressional direction on what sports event contracts are permissible, and under what consumer protections.
Fed Pause, Hawaii Labor Strain, and Prediction Market Regulation
- Whether the Fed signals “pause” after its third rate cut, and how quickly credit-card APRs respond from ~19.8%.
- Hawaiʻi 2026 labor strain: minimum wage rising to $16, versus tourism softness and federal-linked job losses.
- Maui visitor momentum: arrivals up 7.6% YTD, but daily census still below 2022. Watch length of stay and hotel pricing.
- China’s 2026 policy specifics on boosting imports and raising pensions. Concrete fiscal steps matter more than slogans.
- Congress and the CFTC response to the NFL’s warning on prediction markets. Any prohibition or licensing framework could reshape the category fast.
