Monetary policy remains the key to the markets. The Federal Open Market Committee predicts one rate cut in 2026, but the panel will get a lot of data before they meet on Jan. 27-28 that could change those dynamics. Bill Adams, chief economist at Comerica Bank, will join us live on Jan. 29 at 1 p.m., Eastern, to break down the decision, analyze the post-meeting statement and Fed Chair Jerome Powell's press conference. Register now.
LEADERS is a flagship channel that spotlights C-level executives and top experts as they discuss transformative topics for an audience of key decision-makers. We deliver thought leadership on the most pressing issues driving financial services.
Transcription:
Transcripts are generated using a combination of speech recognition software and human transcribers, and may contain errors. Please check the corresponding audio for the authoritative record.
Gary Siegel (00:09):
Hi, and welcome to another Bond Buyer Leaders Event. I'm your host Bond Buyer managing editor Gary Siegel. Today we're going to discuss the Federal Open Market Committee meeting and monetary policy. My guest is Bill Adams, chief Economist at Comerica Bank. Bill, welcome and thank you for joining us.
Bill Adams (00:32):
Thanks, Gary. It's my pleasure to be with you.
Gary Siegel (00:35):
So a little aside to the audience, there'll be no separate question and answer session, so if you have a question, just pop it into the q and a queue and we will get to it. So Bill, was there anything in the post-meeting statement or Fed Chair Jerome Powell's press conference that either surprised you or grabbed your attention?
Bill Adams (00:58):
Gary, I feel like this decision was kind of like a Seinfeld episode. It was a monetary policy decision where nothing happened. And I mean, of course the Fed didn't make any changes to policy, but also it was just remarkable how many questions Chair Powell was asked during that press conference where his response was, I'm not going to answer that. I don't have anything for you. I'm not going to comment on that. It was just there was the non-answers I think were really the main takeaway. The Fed and Chair Powell in particular, there's just so much territory that they're electing not to comment on, which speaks to the kind of politically tense environment in which the Fed is operating right now.
Gary Siegel (01:50):
Well, in fairness to Chair Powell, it's been his longstanding rule that he did not comment on anything political, and this has been going on since he was first elected chair.
Bill Adams (02:04):
That's definitely the case. I think what was different in January is there's so much politics that people want to hear how the Fed will respond to questions about will Chair Powell stay on as a Fed governor if after the end of his term in May, no comment there. Questions about the Fed's interactions with Congress in the midst of this pressure campaign on the Fed to reduce interest rates? No comments there. Reactions to what the administration is saying about how Chair Powell's doing this job? No comment there. So it's as you said, definitely not a departure from Chair Powell's previous practice in staying out of politics. But the environment I think has changed dramatically for the Fed
Gary Siegel (03:03):
And does the dissent that we're seeing have anything to do with the political pressures on the Fed?
Bill Adams (03:17):
You can't read into another person's heart, right? So I think what has happened at the Fed in the last couple of months is that the governors who were appointed by President Trump have been more receptive to the idea of reducing interest rates more and earlier than other governors. And so we saw this pattern reemerge at this decision in January, the dissent by Governor Miran and Governor Waller do I have that right? The other dissent. And so both Trump appointees, I think the takeaway is that the Fed now sees monetary policy as approximately neutral. You can argue about how many angels can dance on the head of a pin and exactly which level of interest rates is precisely neutral. But they're not going to try to do that. They think it's kind of in the range now. And the question is, should they continue to tweak interest rates lower, leave them where they are.
(04:37):
And most of the Fed's policymakers now feel comfortable watching to see what happens with the three quarters of a point in interest rate reductions in the fall and early winter. The arguments for additional rate cuts, you can make arguments for additional rate cuts based on the softness of labor demand. And I think to be honest, we will get this jobs report a week from Friday, which will likely have substantial downward revisions to payroll's growth in 2025. And then a month from that, we will get another job report which will have those revisions to the household data. So the data from which the unemployment rate is calculated will be revised. That's delayed because of the government shutdown. And I suspect that after those revised data come out, we will see a picture of a kind of perplexing job market in the US where on the one hand not much labor supply growth because of tighter immigration policies.
(05:44):
On the other hand, definitely seeing weakness in labor demand and it's kind of a Rorschach blot at this point. You see both of these slowdowns in labor supply and labor demand, which one do you find more compelling as a trend for the economy? And I think some Fed policymakers could argue that labor demand is the more worrying development. It's not the predominant view right now that that actually might change though after those revised data come out in a month or two. But for the January decision, that data's not available. The Fed has their estimates of what that data might look like, but that's not quite the same as having the data in hand. And the Fed is also very, very cognizant that they want to wait until the public has information in hand from statistical agencies that they can point to justify their decisions as a way to bolster the credibility of what they're doing and to bolster the view that the Fed is an independent institution making decisions based on hard facts. So I think given that context, not surprising that they were on hold in January, and I think the arguments against that for a rate cut, you could justify them on the economic data, but they're not as compelling as they were a couple of months ago.
Gary Siegel (07:23):
Bill, what is your outlook for the rest of the year? How many rate cuts do you see?
Bill Adams (07:29):
I think, well, let me give a little context. First of all, it's great to be on this program and I really love this format where we can have a more in-depth discussion. So I'll walk you back a couple of weeks. When we kicked off the year, I was expecting the Fed probably to be on hold at this January decision, but I thought that a rate cut as early as March was pretty likely given that I expect downward revisions to labor data in these upcoming revisions, which we discussed. And given that going into the end of 2025, the leading indicators of the labor market have been weakening quite noticeably. You look at the unemployment rate for teenagers, the unemployment rate for black or African-American workers, these tend to be canaries in the cold mine for the US job market and weaken ahead of weakness of the broader labor market.
(08:23):
And those unemployment rates have been ticking higher in recent months. Again, harder to read because of the government shutdown, but what data we have does point to weakening around the edges there. And Chair Powell referenced that in the press conference in January. So a couple of weeks ago I would've told you that is those data to the extent that we can forecast the future rather than the past harder job there. Those data suggests that the future will have an additional incremental softening of the job market, which I think could make an argument for another rate cut in March. And I had three quarters of a percent in rate cuts in my forecast for 2026 when the year kicked off after this pressure campaign on the Fed with the investigation opened into Chair Powell coming after the court case against Governor Cook, it feels like the bar is higher for the Fed to make interest rate cuts to justify those cuts given that they have to, or fed policy makers will feel they're under pressure to demonstrate their continued independence from political pressure to financial markets to us as well as international investors.
(09:45):
And so that means that the data to justify interest rate cuts will probably have to be a bit more compelling than it would've needed to be had there not been this change in the political context. So right now, I would say more likely two cuts in 2026 than three and maybe less than that. Now what I will say is I think that the US job market is softer than you would expect given that the unemployment rate right now is hovering between four and a quarter and 4.5%. And that's both because of those leading indicators that I measured. It's because of the low level of job openings, the low hires rate in the US labor market and economists. We have the bad habit of being like the drunk who lost keys in the park searching for them under the lamppost because that's where the light is shining.
(10:47):
There's no data right now on exactly what the labor market impact of AI adoption is going to be in the future. The backward looking data that we do have shows that we've seen a big softening in the job market for IT professionals for the IT industry in general, despite IT industry profits and revenues and so forth holding up. So to my mind that suggests that the adoption of AI is likely to lead to at the very least slower job growth of white collar occupations over the fed's forecast horizon and if not perhaps a decline. I think that's within the realm of possibilities. And so if I were a policymaker, I would be thinking about downside risks to labor demand going into 2026. So long story short, I kind of am sympathetic to the view of additional rate cuts just based on the economic fundamentals right now.
(11:50):
And then the counter argument to that is of course inflation is still over the fed's target. That's not good from their perspective, this will be likely the sixth year running now of inflation over target. So at some point the short term turns into the long term and the Fed needs to think about that. And so that's a database argument against rate cuts. But I think the more salient argument is that the Fed is their policymakers feel pressure to demonstrate their continued independence and the continued independence of monetary policymaking. And so that just kind of makes it harder for rate cuts to happen in the current environment. So long story short, I would say two is kind of a reasonable base case for 2026. If we see some market weakening of the labor market, then may three comes into play. If the economy holds up better than expected, I would say one rate cut in 2026 or perhaps a hold.
Gary Siegel (13:04):
So the possibility of a new Fed chair who's more amenable to rate cuts doesn't play at all in this scenario because the other Fed voters are not on board with rate cuts.
Bill Adams (13:22):
The Fed chair has a lot of influence over the framing of the discussion of monetary policy on the committee and they can use that power of framing to influence the debate and the terms of the debate. But the Fed chair is first among equals, they are not the executive of the other members when it comes to making monetary policy decisions. And so I think especially given ample evidence from reporting from speeches, et cetera, fed governors, the presidents of the regional Federal Reserve Banks are thinking a lot about demonstrating their independence to financial markets. I think that the influence of the new Fed chair will probably be nudging at the margins rather than totally changing the approach. I will say that it seems like there's a very good chance that there will be no further changes in interest rates during Chair Powell's term, the economy. While I do think that the labor market is slowing real GDP is holding up just fine in the US probably will be solid again in the first half of the year.
(14:47):
Given the interest rate reductions last year, we see a pickup in mortgage purchase applications in recent months. A lot of the monthly housing data have performed better than expected during the winter lull. And I think that is going to boost housing and housing related demand furniture, appliance sales, you name it. Those kind of ancillary industries that are linked to housing should do better in the next couple of months as a result. So I think in the near term, probably the Fed would be on hold unless we see some new big shock to the economy which is not visible today. I would say that there will be a change of tone with the new Fed chair. Now if it turns out that we see a number of members of the FOMC stepping down and see new appointments there, that would change the picture and personnel's policy. And you can't rule things out there. But I think if we stay with the base case that chair Powell steps down as fed chair and hard to say whether Chair Powell will continue on the committee or not after he steps down. That was another one of his no comment on that right now answers at the January press conference. I would expect that the influence of the new Fed chair on monetary policy will be more what gets talked about and how rather than what is the real outcome of the votes.
Gary Siegel (16:33):
One of the questions that Powell did answer that I was surprised he answered was what advice he would give to the next Fed chair. Did you have any takeaways on that? Any thoughts?
Bill Adams (16:47):
I thought his answer was it felt like there was a bit of a hidden contradiction in his answer. On the one hand, he said the Fed should stay out of politics, the fed chair should stay out politics. That's been his longstanding practice to not comment on politics in the public arena. On the other hand, he said that the Fed chair needs to be very responsive and maintain good relations with Congress, which is he articulated as the main body that the Fed has accountability to. And that's convenient language for a Fed chair. If you want to demonstrate that you don't answer to the executive branch, you answer to a different branch of government that's not involved in, but also Congress is a political institution, right? So the Fed chair I think also needs to be, to my mind, the answer was pretty nuanced. I heard Chair Powell's answer as he advises the next Fed chair to stay out of the arena of public politics. But to be, I'm very proactive in developing relationships and maintaining relationships with politically elected officials because without those relationships, the Fed cannot protect his independence.
Gary Siegel (18:25):
So we have a question from our audience that I think fits in nicely here. Can you discuss President Trump's argument in a post this morning that higher tariff revenues justify lower fed rates? What is the possible connection between these two things?
Bill Adams (18:46):
I apologize that I have not seen President Trump's post yet. I think the tariff, so an argument you can make for lower rates based on tariff increases would be that tariffs are a form of tax. It's a tax increase, right? It's a tax on goods that we buy for their source from outside of the country. And so that's a tightening of fiscal policy. And if fiscal policy is tighter, you can argue that monetary policy can be looser with tighter fiscal policy. If tighter fiscal policy is contributing to the government, borrowing less a decrease in the fiscal deficit. I see tariff revenues and the fiscal impact of tariffs in the broader context of overall fiscal policy. And if you look at the combined fiscal impact of the tariff increases and the tax and spending bill passed last July 4th, the one big beautiful bill act fiscal policy writ large I see is still quite expansionary in 2026.
(20:00):
There's the tax cuts for individuals, the increased deduction for seniors, the no tax on tips on overtime, et cetera. The increased salt deduction for people in states with high state and local taxes. And then a number of effective tax cuts for businesses that are over the long run are tax timing. But in the short run, a tax cut is a tax cut. And so that as well as the scheduled increase in government spending in that bill is larger than the fiscal impact of tariffs. So I see fiscal policy as an argument to expect on the one hand, economic growth should broaden in 2026 with more money in household pockets, more free cash flow, staying on business balance sheets rather than going to the treasury and taxes and more government spending. That should increase economic activity. On the other hand, for the Fed, that means that fiscal policy does not justify interest rate cuts the way that kind of narrowly conceived. Just looking at the tariff impact might.
Gary Siegel (21:24):
Do you think the bond market and the Fed are on the same page?
Bill Adams (21:35):
I think the bond market and the Fed, they fill really different roles in the US economy. The Fed sees the economy as being kind of, well, what chair Powell was arguing at the January press conference is that he sees the unemployment rate as kind of in an okay spot. Inflation is on the high side but not an emergency. It's sort of I think of inflation this year as a frustration for consumers, for businesses, for the Fed rather than an emergency. But in general, the Fed describes the economy as being fairly balanced right now, kind of a B economy, not an A economy, but not a C or a D. The bond market right now, I think there's been some volatility in the last couple of months. To my mind, the defining characteristic of the bond market in the last few months has been really narrow credit spread.
(22:43):
So optimism about economic growth, but a steepening of the yield curve anticipating that we will see continued fiscal deficits and that higher interest rates are necessary to keep buyers financing the treasury given the macroeconomic backdrop in the United States. So I think the bond market is telling me, or my takeaway is that the US economy is growing and the US economic growth outlook is solid, but we also have a substantial fiscal deficit in the United States and the federal government now has to pay a real interest rate to finance its borrowing in a way. That was not the case 10 years ago.
Gary Siegel (23:30):
Bill, are you worried about stagflation
Bill Adams (23:36):
Not in the near run? So one of the questions at the press conference for Chair Powell was what do you make of the weakness of labor market data on the one hand and solid GDP data on the other hand, and Powell mentioned that his quote was the lower right, the lower received wisdom about economic data is that economic data are going to be revised over time. This is sort of the first cut of economic history, more likely that GDP data gets revised to be closer than labor data than the other way around. That's the received wisdom. But I find it pretty compelling that GDP is outperforming labor market data right now given that we have a clear macro narrative of productivity being driven by technological progress and a lot of survey data, a lot of business commentary in earnings in earnings outlooks is talking about how technology is allowing businesses to grow with less increase in employment than we historically would have seen.
(24:54):
So I don't see the stack in stagflation right now. The inflation picture in the United States, there are some inflation pressures that are clearly related to tariffs. Coffee imported product, coffee prices were up. I think the highest on record for instant coffee in one of the last CPI reports to 2025 other imported goods. You see it in the PPI reports, you see it all over business surveys talking about margin pressure from tariffs. Not as much of those costs passed on to consumers so far, but probably we will see that passed on to consumers one way or another in 2026. But other parts of the consumer price basket housing is not as inflationary, I would say not really that inflationary at all in the US economy in 2026, we've had a lot of housing supply added in the Sunbelt and that has translated into some give back of those big price increases and in house prices and rents in Florida, in Texas and Arizona.
(26:07):
And that is so on average housing cost inflation, which passes through to the CPI and PCE indexes over time, I see it as trending maybe in the low single digits, kind of hovering pretty close to zero right now. And you see different price changes in different price indexes right now, but they're all low single digits. So I think that's good news for inflation. You do see other idiosyncratic inflationary pressures like record high beef prices. You see inflation pressures from homeowners insurance from auto insurance. A lot of this, I think you basically can tie back to more frequent droughts in grazing lands for beef in the United States. That's I think a knock-on effect of climate change. And you see also the effects of more frequent natural disasters that are more costly in those same Sunbelt regions that have been the fastest growing parts of the country since the pandemic.
(27:20):
So again, those are not really issues that are driven by monetary policy or the business cycle. And so I think inflation to my mind, we're seeing inflation because of some changes to the structure of the economy and because of tariffs, parts of inflation that are more affected by the business cycle seem to be pretty well under control in my opinion. So I think inflation is likely to move lower over the course of 2026. I don't know that it'll get back to the fed's target this year. I think probably we'll close this year with inflation two point something, 2.4 to 2.6% depending on what happens with energy prices. But I don't think, I don't see evidence right now that the US is headed into another pickup in inflation in the next year to 18 months. I'll put it that way.
Gary Siegel (28:19):
Bill, do you think the Fed is very serious about its 2% target or if they hit 2.4% like you said, or 2.6, would that be enough for them?
Bill Adams (28:32):
I think the Fed is serious about the 2% target, but monetary policy makers think that setting the interest rate today, it's not influencing the inflation rate today, it's influencing the inflation rate in 12 to 24 to 36 months. And so they're setting monetary policy today based on what their view is of where inflation's likely to be over that time horizon. And so I think there is a decent argument to be made that monetary policy can be more or less neutral right now or on the high end of neutral or what could be neutral, meaning not really providing a boost to the economy not being a headwind of the economy, given that a lot of the inflationary pressures that we're seeing today are driven by tariffs. Assuming that we don't see further increases in tariffs, which I think is, we can't know, but it's a plausible assumption and assuming that the inflation pressures that we saw coming out of the pandemic on housing and on labor intensive services are moderating given the cool down in the housing market given the cool down in the labor market.
Gary Siegel (29:48):
So we have some questions from the audience. How will the proposed temporary decrease of credit card interest play into overall rates?
Bill Adams (30:05):
Hard to know if that will happen and what the timing and magnitude would be. I think if you say hypothetically that there is a new market for lower interest rate consumer credit in the United States, we might see faster growth of consumer credit as a result of that. I think it would just kind of depend on the broader business context of how that product comes into being and where that sits relative to existing consumer credit products. That's an issue that I'm sort of watching, but hard to know exactly how it plays out at this point.
Gary Siegel (30:54):
Do you anticipate that government funding issues and a possible government shutdown will impact fed rates this year?
Bill Adams (31:04):
So one dimension of that that I'm watching quite closely is the funding for immigration enforcement, which was one of the big areas of funding increase in the 2025 tax bill and after the events of the last few weeks, it seems you have to think about what would happen if that funding is rescinded and what that would mean for the broader economy. I think that to my mind you have to think that attach a higher kind of likelihood to that scenario than you would have a couple of weeks ago. I think that means that I think there are a lot of ways that that could play out. One of the things that I try to do as a macro economist is to remind myself that I don't have a lot of comparative advantage in gaming out politics or fiscal policy relative to other people. And so I tend to wait until bills are signed before I kind of incorporate them into my economic forecast right now. So I will say that my forecast today is based on what's present law for fiscal policy for 2026. If that funding for ice is rescinded, then I would say I would watch to see does that funding get repurposed or does that turn into a change in the overall fiscal stance?
(32:51):
I'm kind of thinking out loud here, but my hunch is that it's at least as likely to be repurposed as it is to be to turn into an outright fiscal tightening. So hard to say. I think we would need more information to know what that would mean for the broader economy. I think the flip side of that is you have to think of the impact of tighter immigration enforcement on the economy right now. And there we can see through the census data that was published earlier this week, we are seeing this dramatic slowdown in immigration and its flow into the population data. We'll see what that means for the government's estimates of labor force data in revisions that come out in early March. But I think what we're likely to see is that the supply of people coming into the labor market to take jobs in particular, to take jobs that are in the industries where immigrants are overrepresented jobs, where people work on their feet, work outdoors, construction, agriculture, food services, home healthcare, medical assistance and so forth, we're likely to see that that part of the job market is tightening and we're seeing less labor supply coming into the labor market because of immigration.
(34:20):
And so that means that while I think that the broad labor theme for 2026 is probably going to be labor demand is weaker than labor supply, we're likely to see these pockets of tighter areas in the job market that are being disproportionately affected by immigration enforcement.
Gary Siegel (34:45):
Bill, the next question is, if consumer sentiment is that an all time low? It's hard to believe that inflation and employment are not a concern, especially when food utilities and rent inflation are hurting households.
Bill Adams (35:04):
So this question for is about the consumer confidence index from the conference board that came out earlier this week, which a big drop in January weaker than the worst consumer confidence reads during the COVID shutdown of 2020. And if you look at the, I encourage, if you're worried about that print, go to conference dashboard.org. Earlier in my career, I was an economist for the conference board for two years. I have a really high opinion of the organization and read the details of the commentary on that consumer confidence report. What you see is that it's really politics and geopolitical issues coming up in the comments from consumers about why are they more concerned in January. It's the ice surge in Minnesota, Greenland, Venezuela, these issues that are more about uncertainty, political uncertainty and domestic turbulence in the United States rather than classical, conventional macroeconomic issues. Like what is the outlook for the labor market? What is the outlook for inflation? The inflation details of that consumer confidence survey. Actually the median inflation expectation in the survey dipped down a little bit. It's as if someone got ahold of a monkey's claw last month and said, what do we do to make consumers think about something other than affordability in January?
(36:52):
That was not top of mind. So I think that consumer confidence survey, it tells you a lot about what Americans are worried about. I don't think it says as much as it would typically about what people think about the outlook for the job market or the outlook for inflation.
Gary Siegel (37:12):
What factors do you see as the most influential for mortgage rates in the near term, particularly inflation expectations, term premiums or broader market sentiment and where could mortgage rates diverge from the fed's policy path?
Bill Adams (37:33):
I think mortgage, so my outlook for short-term rates, we've covered I think likely lower by the end of the year. I think the 10 year treasury yield probably hovers in this four to four and a quarter percent range averages somewhere in there over the course of 2026 with fluctuations out of that range driven by short-term market shocks likely. But I kind of see that's probably the sweet spot for the 10 year. People ask me occasionally where do I think the 10 year is likely to average over the long run. It's not something that I attach a lot of confidence to because lots of things can happen in the long run, but when I'm forced to attach a number to it, I end up with something that's either where we are now or perhaps lower. So I think with short-term interest rates, we're probably at the high end of a neutral rate for the 10 year treasury.
(38:39):
And then you kind of have to make an assumption about fiscal policy for that of course. But that's sort of a long tangent we don't need to get into. But I see the 10 year as the anchor for mortgage rates and I think relative to the tenure, which I would expect to stay more or less stable, I think we'll probably see the premium of the 30 year fixed rate narrow somewhat over the course of 2026 because I think origination's going to pick up, we have more housing supply in the us, there's more existing home listings. Home builders for new construction are motivated to keep new homes selling home builders. Some of the most optimistic people in the US economy, they think that if you build it, they will come. And so they are shrinking floor plans, they are simplifying models and they're offering mortgage buydown incentives to keep home selling.
(39:41):
And a lot of the people who in 2019, they were thinking about selling their home in 2020, they delayed it for obvious reasons in 2020, then they held out in 2021. In 2022 mortgage rates surge, they don't want to sell then '23, '24, all the wrong years to sell. I think a lot of those delayed home sales are coming to market now because people gradually adapt to a new normal. And I think that built up the delayed sales for the existing home market are going to be a big feature for the housing market in 2026 despite mortgage rates that kind of stay high relative to the pre pandemic normal. So I think there's a greater than 50 50 chance that we see the 30 year fixed rate move down under 6% in the second half of this year and perhaps be between five and a half and 6%. I would say more likely between five and three quarters and six, but maybe lower is possible. And I see that as more likely than a move higher. So I think we'll see some relief on mortgage rates over the course of the year driven more by a pickup in activity and more competition from mortgage issuers rather than by a movement in the long end of the yield curve.
Gary Siegel (41:12):
Last question from the audience. What kind of impact would a partial government shutdown have on funding for the not-for-profit sector?
Bill Adams (41:23):
I think probably the impact on the not-for-profit sector would be short term. I think the not-for-profit sector in the US had a big impact from the rescindment of government funding in 2025. I think a lot of that is already in the rear view. So I would expect that the impact of government shutdown will probably be relatively short term and relatively short-lived and not-for-profits will see a lot of that money coming back after the government reopens. That's historically what we've seen. And if you look at the last government shutdown, it turned out that the government talking about various agencies not getting funding, various payments, not going out for parts of the economy, like the not-for-profit sector like food stamps, payments, like the air traffic controllers saying, oh, we've gone too long without a paycheck, we're not going to be coming in. That's all brinkmanship that kind of plays into this. So I would expect that the economic impact on the non-for-profit sector, if any, would be very short-lived.
Gary Siegel (42:48):
Bill, what questions are you getting from your clients? What are they worried about?
Bill Adams (42:55):
The perennial question is about the fiscal deficit. And there I think the answer, at least in the short run is that the fiscal deficit stays large in 2026. I think we'll run a deficit of about 6% of GDP. This came up in the fed's press conference chair Powell said that we are on an unsustainable path for the federal debt. Now the good news there is that the silver lining at least, is that the level of federal debt is not a problem for the economy today. And so we have latitude to figure out a solution to that problem and hopefully we see strong productivity growth that we've had coming into 2026 sustain itself over the course of the year and into 2027, which would make it easier to service that debt over time. But that is one that I would say comes up almost every time I speak to customers.
Gary Siegel (43:51):
Very good. We're out of time, so I'd like to thank you for your participation. I'd like to thank our audience for logging in, and again, thanks to my guest, Bill Adams, chief economist at Comerica Bank. Have a good afternoon everyone.
Bill Adams (44:09):
Thank you, Gary.
