The Halfway Mark
July 3, 2026
The debate over interest rates continues.
Should the Federal Reserve raise rates? Should they keep rates where they are? Or is it finally time to start cutting them?
Why do interest rates matter so much? They affect nearly every corner of our economy—from mortgage rates and car loans to credit cards, business borrowing costs, savings accounts, and investment returns.
In my experience, interest rates tend to impact the market when they move in a meaningful way, not when they are rangebound.
I’ll be the first to admit that I thought interest rates would be lower by now. The facts changed.
To me, that’s a great reminder that the market doesn’t care about our predictions. That’s why I’ve always believed it’s better to adapt to what the market is actually doing than to become attached to a forecast.
Right now, the Fed is dealing with a bit of a push and pull.
On one hand, there are good reasons for the Fed to remain patient. Inflation has come down significantly over the last few years, but the job isn’t finished. It’s still above the Fed’s target, and oil prices remain something to watch. If they move meaningfully higher and stay there, they could put renewed pressure on inflation. That’s why some believe rates should stay where they are for now—and a few are even calling for another hike.
On the other hand, there’s a good argument for leaving rates alone. The economy is still growing, but it’s not exactly blowing the doors off. GDP came in at 1.5% in the second quarter. Wage growth has largely kept up with inflation, so consumers have continued to spend. If that’s the case, what’s the rush to raise rates?
Personally, I think the Fed stays patient for now. The kicker is Kevin Warsh is under a lot of pressure to lower rates, and he’s in a tough spot. No matter what he does, he’s going to have people criticizing the decision.
Let’s zoom out for a minute. Interest rates have been in a range for the last two and a half years. We’re near the top end of that range today, but we’ve been here before. It’s also easy toWe’re officially halfway through 2026. Time moves fast.
This week’s Flywheel is a look at what the first six months of the year reminded us.
There were plenty of headlines. Some good. Some scary. And some that seem to always be here.
As we always say, our job as investors is to separate the noise from what the market is actually telling us—and, more importantly, what’s actually happening beneath the headlines.
Let’s take a look at what the first half of 2026.
The Economy
If there are two words to describe the economy over the first half of the year, it’s this:
“The Same.”
Economic growth was positive. The jobs market is still sluggish, but we’re continuing to create jobs and unemployment remains in check. Inflation ticked higher, but so did average wages, meaning incomes have generally kept pace with the increase in costs.
The Federal Reserve is still on hold. If you’re still holding your breath for a big change in interest rates… I wouldn’t. I was six months ago, but I got that one wrong
To sum it up, the economy continues to grow, consumers continue to spend, and the economy remained resilient.
Corporate America
I’ll keep this one short…
If you’ve been reading the Weekly Flywheel, you already know the story here.
Corporate earnings have stolen the show during the first half of 2026. Across the board, companies have continued to deliver strong results, and many expect that momentum to continue through the rest of the year.
At the end of the day, that’s what drives stock prices over the long run.
The Market
The headlines were noisy. The results were pretty clear.
- S&P 500 +10%
- Nasdaq +13%
- Dow Jones +9%
- Russell 2000 +22%
- Gold -7%
- Bitcoin -30%
- Crude Oil +21%
If you stayed invested… you were rewarded.
If you focused on areas of growth… you were rewarded.
If you ignored the noise and didn’t chase the next hot trend… you were rewarded.
That’s what the first half of 2026 reminded us.
Flywheel Videos
Six months ago we started creating educational videos at PureVest.
What was an idea that sat in my head for years finally came to life. So far, we’ve posted 59 videos, all with one goal in mind.
To help simplify investing and financial planning for you. And to inject our viewpoints—which often go against the grain—into the conversation.
I hope you’ve watched them and found them helpful.
We’re just getting started.
One Last Thought
No two halves of the market are ever the same.
But if you stick to the same principles for a long enough period of time, you’ll be just fine.
Focus on what you can control.
Have a process.
Stay invested.
Think long term.
Boring? Sometimes. Effective? Almost always.
Now I’m shutting the computer down for the next 60 hours to enjoy the holiday.
I hope you do the same. forget that today’s interest rates are actually much closer to their historical average than the near-zero rates we got used to over the last decade.
And the market has continued to move higher.
Nobody knows exactly where interest rates will be six months from now. But we do know that markets have always found a way to adapt. I wouldn’t bet against them now.
Have a great weekend!