Main Street Banking: A Podcast for Community Bankers · 2026-10-30 · 13 min
Key moments - from our scoring
Substance score
40 / 100
Five dimensions, 20 points each
The Fed concluded its October 2026 meeting with an unchanged fed funds rate at 4%, though two officials - Cleveland Fed President Hammock and Governor Lisa Cook - dissented in favor of a rate increase. Chairman Warsh surprised markets by announcing that one of the eight 2027 meetings and two of the eight 2028 meetings will focus on strategic planning rather than monetary policy adjustments, while reserving the right to call emergency meetings if needed. On the inflation front, the core PCE rate ticked up to 3.1% from 3.0%, marking the highest level since December 2023 and indicating persistent price pressures despite years of elevated rates. Third quarter GDP came in at 3.4% - a significant jump from Q2's 2.2% - but the growth masks underlying weakness: inventory accumulation provided a temporary boost, and consumer spending outpaced income gains, meaning households went further into debt to fuel growth. The bond market has shifted its expectations downward, with 10-year Treasury yields falling roughly 30 basis points to around 4.9% from 5.3% at the end of September, largely driven by stock market weakness. Reber, who recently transitioned from ICBA Securities to the Baker Group (now the endorsed broker dealer of ICBA Securities), notes that Treasury yields remain substantially elevated compared to pre-Iran conflict levels and are near 20-year highs relative to 2007, presenting potential opportunities for bond market positioning.
Hosted by Barret School of Banking. The show scores 56.5/100 on substance across its analysed episodes. See the full show profile.
The Fed left fed funds unchanged at 4% as expected, but two officials - Cleveland Fed President Hammock and Governor Lisa Cook - dissented in favor of a rate increase. Chairman Warsh also announced that one of eight 2027 meetings and two of eight 2028 meetings will focus on strategic planning rather than monetary policy changes.
Core PCE inflation rose to 3.1% from 3.0%, which is the highest level since December 2023, indicating inflation has not declined and remains a concern for Fed policymakers despite years of elevated rates.
Much of the 3.4% growth came from temporary inventory accumulation and consumer spending that outpaced income gains, meaning households went further into debt to fuel the growth rather than relying on earned income.
Bond markets are pricing in a 72% probability of a quarter-point rate increase by December 2026, expect rates to rise into January 2027, and are forecasting two full rate decreases by the end of 2027, bringing overnight rates to 4.5%.
10-year Treasury yields have fallen approximately 30 basis points from 5.30% at the end of September to around 4.90%, driven by stock market weakness, though yields remain substantially elevated and near 20-year highs compared to 2007 levels, creating potential bond market opportunities.
Our reviewer’s read on each dimension, with quotes from the episode.
The episode contains a tight cluster of real data points - PCE readings, GDP revisions, Treasury yield moves, and Fed meeting probabilities - but this substantive content is compressed into roughly half the runtime, with the remainder consumed by introductions, travel-season recap, and promotional filler. No particularly non-obvious analytical conclusions are drawn from the data.
The core rate of PCE went up to 3.1% from 3.0%... core PCE was higher than 3.1. I looked it up, it was December of 2023. So we are multi years into since rates have been this high.
a lot of that had to do with growth in inventory which is a short lived benefit. And another part of the reason that GDP went up is that the consumer stepped up its spending pretty significantly... we went further into debt to fuel this growth.
The episode is almost entirely data reporting with conventional interpretations - no contrarian framing, no first-principles analysis, and no perspectives a regular Fed-watcher wouldn't already hold. The most novel item (Fed reducing policy-discussion meetings in 2027-2028) is relayed as fact without any deeper assessment of its implications.
he said that in 2027 one of their eight meetings is not going to discuss changes to monetary policy. They're going to be doing some strategic planning
rates are near a 20 year high if you look back all the way to 2007 or so.
Jim Reber is a genuine long-tenure industry practitioner who works directly with community bank investment portfolios and speaks at state banking conventions - he has real operational credibility for this audience. However, he functions more as an educator-speaker-service-provider than as a senior operator who has run a balance sheet at scale.
I had been with ICBA securities for two plus decades and uh, earlier, um, this year I transitioned over to the Baker Group
I went to 15 state conventions, uh, served the ICBA's National Education Platform.
The episode's clearest strength is its use of concrete numbers: specific rate levels, basis-point moves, probability estimates, and dated historical comparisons that give community bankers actionable reference points. The weakness is that evidence is presented without sourcing methodology or any comparison to prior forecasts.
the bond market is expecting there to be um, two full decreases from where we are now would put the overnight rate at four and a half percent
at the end of September for example the 10 year treasury was pushing a 530. Today it's about a 490. So it's down more than 30 basis points.
The host asks a single, completely open-ended prompt and then steps aside entirely, offering no follow-up questions, no challenges to the GDP or inflation interpretations, and no probing of implications for community bank portfolios specifically. A significant portion of host airtime is spent on mutual promotion and pleasantries.
Jeff. Yeah, go into it man. Tell us what we've been, what we've been seeing out of the Fed and all that's Going on.
And that's a, that's, that's because I tell my banking students, you know, price and price and rate pricing yield, moving on inverse directions. Just putting that out there.
Computed from the transcript - who did the talking, and the words that came up most.
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.
Transcribed and scored by The B2B Podcast Index.
Speaker A: Welcome to Main Street Banking, a podcast for community bankers brought to you by the Barrett School of Banking and ICBA securities. My name is Byron Earnhardt and I'm the programming director at Barrett. It is our mission here to serve the community banking industry with information that is informative, relevant, and hopefully will have a little fun along the way. So from Memphis, Tennessee, home of banking blues and barbecue, welcome to our little corner of the community banking world. And we hope that we can make your bank, your staff, or maybe just even your day a better one. Well, hey everybody, welcome back to the Main Street Banking podcast. Uh, had some uh, been a couple of meetings from the Fed since last we talked. Um, and we are um, we are catching up with Jim Reber who's been out on the road and finding out what's all going on. So Jim, welcome back to the show. Tell us a little bit about yourself and get straight into. Let's talk about what's going on with the Fed.
Speaker B: Uh, thank you, Byron. Um, I'm Jim Reber. I am um, with the Baker Group. That was a change in posture, uh, from earlier this year. I had been with ICBA securities for two plus decades and uh, earlier, um, this year I transitioned over to the Baker Group, which is now happily the endorsed broker dealer of ICBA Securities. Um, so um, very pleased to be here. It's been a very productive ah, very productive uh, couple of months. So um, grateful for that opportunity. Uh, I've been, I'm doing about the same thing I've been doing, uh, which is getting out and about amongst um, the uh, community bankers across the country and making presentations when asked and uh, writing articles for publication and ah, association literature. Uh, so it's been ah, a sort of a tailwind kind of a, kind of a year and sort of a new, a new start as it were. So I'm grateful for the opportunity to be on this podcast, Byron. Um, you know, I am also very happily on the Board of Regents for the Baird School of Banking and Byron and Chris have seen fit to put me on their faculty. So uh, uh, that's something else that has continued apace. And uh, I sure appreciate the um, uh, chance to contribute.
Speaker C: Absolutely. One of our highest rated faculty members and that's in the investment management so class. So it's, you know, you know, Jim's good when he can get the valuation scores that he gets on that topic. So.
Speaker B: Well,
Speaker C: Jeff. Yeah, go into it man. Tell us what we've been, what we've been seeing out of the Fed and all that's Going on.
Speaker B: Well this has been a busy week, uh, even irrespective of the Fed's meeting, uh, the Fed met on Wednesday or they, it was a, they concluded their meeting on Wednesday as expected. Uh, they uh, left fed funds unchanged, changed at 4% market was expecting that. There was very little market reaction. Uh, Chairman Warsh's comments afterwards were a little bit surprising to the, to the listeners in that um, he said that in 2027 one of their eight meetings is not going to discuss changes to monetary policy. They're going to be doing some strategic planning, uh, and they're going to be discussing some policy but they will not be meeting for the purpose of changing uh, monetary policy. And then he said that 2028, two of the eight meetings will not have monetary uh, policy discussion. It'll be larger strategic planning, um, conversations going on. Uh, he made the case that that should still be ah, sufficient numbers of meetings to get um, the absolute number of over for overnight rates, um right sized. Now it's also correct to say that that doesn't preclude the Fed from calling emergency meetings, which we saw happen several times in the last couple of years. Certainly at the start of the great financial crisis, the Fed had um, additional emergency meetings and they did that at the beginning of COVID too. So um, Chairman Warsh has reserved the right to have emergency meetings if something like that erupts. The market was expecting there to be no change to uh, fed funds. They got what they were expecting. Uh, however, uh, there were two dissents. Um, uh, Cleveland Fed President Hammock and one of the Fed governors, Lisa Cook, both voted in favor of having increased to um, overnight rates but tended to vote. Things are uh, unchanged for the moment. The bond market seems to think that it's likely there'll be a increase at the December 9th meeting. When I say likely at the moment it's like a 72% chance of a quarter point hike. January is the first time the bond market is completely convinced there'll be a quarter point hike and by the end of the year this can change in a hurry. By the end of the year of 27 the bond market is expecting there to be um, two full decreases from where we are now would put the overnight rate at four and a half percent. Um, now, now that was Wednesday. Yesterday there were two major economic releases. One is the inflation number and this is that PCE number that the Fed has uh, long pegged its, you know, used as its uh, as its benchmark measurement whether or not they are achieving their, their goals. Uh, the core rate of PCE went up to 3.1% from 3.0%. Uh the overall headline rate um, for the record is 3.6 which was also but 3.1 buyer last time core PCE was higher than 3.1. I looked it up, it was December of 2023. So we are multi years into since rates have been this high. So not only is inflation not going down, it's actually you know, almost a three year high right now. So there's still, still work to be done to inflate obviation fronts. Um, now at the same day yesterday GDP came out and GDP was a little bit of a head fake. It went up a lot. And what this was announced uh, yesterday Byron, was the first release for the third quarter gdp. They're going to revise this again next month and they're going to revise this a third time in December before the third quarter GDP actually goes in the books. But the first reading for the third quarter was 3.4. The second quarter is only 2.2. So that in a vacuum looks like some pretty significant economic growth in just 90 days. But the backstory is a lot of that had to do with growth in inventory which is a short lived benefit. And another part of the reason that GDP went up is that the consumer stepped up its spending pretty significantly. And um, uh, the GDP consumption percentage was a lot higher than GDP than uh, consumer income. So that means that we went further into debt to fuel this growth. So we'll see if the next two months revisions stick at this robust 3.4% or not. Uh, so uh, we'll uh, we'll have further updates before the, the end of the calendar year. Byron, if uh, we can squeeze in a podcast now for, for the record, the bond market has changed its mind about where rates are going in the near term. Month over month. Interest rates are down about 30%, 30 basis points. Uh, at the end of September for example the 10 year treasury was pushing a 530. Today it's about a 490. So it's down more than 30 basis points. Shorter part of the curve is down about 25 basis points. And that means that the bond market has weaned out its expectation for one additional tightening between now and the end of the year. A lot of that has to do with weakness in the stock market. I think we've seen you know, some, some give on, on the, in the, on in the, in the equity market. Um, and there's no real expectations that rates are going to be plummeting. Anytime soon, especially with um, uh, with uh, you know, running at three year high. And Chairman Morse's comments didn't indicate that they were done with their job either. So I think that we're expecting modest increase in fed funds rate. We may be thinking that um, the treasury yields are going to be about where they are now going forward, which are still quite uh, noticeably elevated from when the Iran war started uh, at the end of February, which is now 10 months ago. So that's a quick synopsis of where we are. Uh, and um, uh, maybe um, uh. If um, the listeners are so inclined to think of a purchase or two in the bond market, um, rates are near a 20 year high if you look back all the way to 2007 or so.
Speaker C: And that's a, that's, that's because I tell my banking students, you know, price and price and rate pricing yield, moving on inverse directions. Just putting that out there.
Speaker B: That'll change, Byron.
Speaker C: Never change.
Speaker B: Bond prices and bond yields are inversely correlated.
Speaker C: 100, 100 if you want the math. I'll show you. But you'll have to buy me a new pipe for it in order to get
Speaker B: that out
Speaker C: on me, uh, there. Tim, tell us a little bit. Uh, y' all got some things coming on at Baker which. And, and you, you just come off the road from ah, from travel season. How'd that go?
Speaker B: 2026 was a terrific travel year for, for me. I think I went to 15 state conventions, uh, served the ICBA's National Education Platform. Got me in front of uh, another number of bankers as well. I'm um, very appreciative of the state associations that uh, endorse us and there's, there's everybody at 34 of those. That's given us a lot of visibility, um, and a lot of um, uh, a lot of opportunity and um, again had some terrific travel with you and with uh, uh, Chris Kelly as well. So I um, know that you too are appreciative of the 20 uh, endorsements the Barrett School of Banking has.
Speaker C: Oh absolutely. That and the ICBA endorsement in the state. It's, I mean it's, it makes our job so much easier and we are eternally grateful.
Speaker B: Yeah. And it's time to start thinking about 2027 too. You know, we're going to, you know, we're going to stay at it. We're going to you know, be uh, go everywhere that uh, we can um, practicably um, travel to when invited and I look forward to seeing many of the listeners in person in 20, 27.
Speaker C: Yeah, Chris and I were talking about, uh, yesterday about some, some new states that have endorsed us and plotting, plotting and strategizing where we're heading to next. You're already starting that conversation. So looking forward to seeing some folks and some listeners out on the road and of course spending time with uh, with you too, Jim. So thanks a lot. Yeah, I guess we'll see you uh, probably for the I'm sure December meeting. We'll, we'll have some information and some news particularly as we wrap up the year. Look forward to do another one of these here before the, before we wrap up 26.
Speaker B: Thank you for the opportunity. It's always a pleasure, Byron.
Speaker C: Thanks, Jim.
Speaker A: Well, that wraps up our episode for today. Thank you for listening. If you haven't already, go ahead and subscribe to the podcast so you won't miss out on the latest episode. We'd also appreciate a five star rating as well as that will help get the content out to more listeners. We appreciate ICBA securities for their sponsorship and if you would like to know more about quality investment products, services and education at competitive prices, check out their website@icbasecurities.com and finally, if you don't follow Barrett on our social media platforms, be sure to check us out on LinkedIn, Twitter and Facebook to stay up to date with all the cool new things that we've got coming out up. And as always, from Memphis, Tennessee, the home of banking, blues and barbecue. Thanks again for tuning in and we hope you have a great day.
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