Jeff Powell, Founder and Chief Executive Officer
Elevage Partners | October 27, 2026
I grew up in Pinetop, Arizona, not far from where our Show Low office sits today. Pinetop was a small town, and the only radio in the car was AM. On drives with my dad, into town to shop or out into the White Mountains to fish and hunt, that usually meant Paul Harvey.
His segment was called “The Rest of the Story.” He would tell you about someone or something you thought you knew and hold back the one detail that changed it. Some days we sat in the parked car with the engine off, because we knew the turn was coming and wanted to hear what it would be. Then he would deliver it: “And now you know the rest of the story.”
What People Are Feeling
The University of Michigan’s consumer sentiment index finished October at 48, the second-lowest reading on record, Reuters reported. The survey’s director, Joanne Hsu, put it plainly: “Purchasing power continues to dominate consumer views of the economy.”
Over the past month we have written about where that pressure comes from. Government borrowing, and the higher price lenders now charge to finance it. Energy and the conflict with Iran, working their way through prices in stages, from the pump to the grocery shelf. And tariffs, which are a tax on what people buy. Borrowing, energy, and tariffs are the pieces of the story so far.
What Is Being Offered
Listen to the campaigns and the relief on offer comes in three broad kinds: money sent back to households; tax cuts on what people buy, from a break on the gas tax to rolling back tariffs; and help with costs like health insurance. We won’t grade them, and some of them would help. A household that gets a check, a cheaper fill-up, or a smaller premium will feel the difference.
Every one of these proposals still has to answer the question we’d ask of any plan: how is it paid for?
The Rest of the Story
Unless something else is cut to make room, relief is paid for with borrowed money. And in our assessment, government borrowing is the main long-term reason money costs more in the first place.
The numbers are large before any new relief. In February, the Congressional Budget Office projected a deficit of 5.8% of the economy for the fiscal year that just ended, well above the 50-year average of 3.8%. Interest on the debt is growing fastest: about $970 billion last year and, on CBO’s projections, more than double that by 2036, $2.1 trillion, according to the Committee for a Responsible Federal Budget.
That interest bill feeds on itself. Higher rates make the debt more expensive to carry, a more expensive debt requires more borrowing, and lenders charge for the extra. The 10-year Treasury yield, the benchmark mortgages follow, closed Monday at 5%, according to the Treasury. Relief that adds to spending also gives the Federal Reserve one more reason to keep the short-term rate it sets high, after raising it in September.
So here’s the part missing from the ads. Relief paid for with borrowed money eases this year’s bills and feeds one of the reasons they are high. In our view, borrowing is the slow force that keeps money expensive over years. Over the next year or two, the conflict with Iran and tariffs push harder on prices. Both run mostly through the White House rather than Congress, and this is a midterm, so neither issue is directly on the ballot.
What Would Change Our Mind
We write down in advance what would make us drop a view, so we can’t talk ourselves out of it later. For our view that rates stay higher for longer, the test is two things together: core inflation back at the Fed’s 2% target and staying there, and the federal borrowing path narrowing. Either one alone isn’t enough.
After Nov. 3, the question we’ll be watching isn’t who won. It’s whether anyone, from either side, narrows the borrowing. Until we see that, we are planning as if money stays expensive.
What It Means for You
Many people put big decisions on hold until after an election, because the ground can feel like it’s about to shift. In our assessment, though, the two things most of those decisions depend on — the cost of borrowing and what savings earn — are unlikely to move much because of the vote.
If you’re weighing a refinance, a home purchase, or a loan for a business, we would not wait for the election to bring rates down. If you live on income from savings and bonds, expensive money has another side: a 10-year Treasury pays about a full percentage point more than it did a year ago, and money from bonds maturing now can be reinvested at those higher rates.
We built the portfolios we manage for a world in which money costs more for longer, so we aren’t repositioning them around the election.
Paul Harvey always made you wait for the rest of the story. This time the rest of the story is already here: the bills are real, some of the relief would ease them, and the borrowing behind it is what keeps money expensive.
The decisions made now, in the conditions we actually have, are what long-term results are built from: when to borrow, how maturing bonds get reinvested, when to retire. If an election-season decision is weighing on you, write to us at info@elevagepartners.com and we’ll work through it with you.
Sources
Encyclopaedia Britannica, “Paul Harvey.” Paul Harvey’s program.
Reuters, “US consumer sentiment near record low ahead of midterm elections,” October 23, 2026, via Kitco News. Election date, Consumer sentiment, the survey director’s comment, and the September rate increase.
Russell Investments, “U.S. midterm scenarios and investment implications,” October 15, 2026. Relief proposals under discussion and Tariff authority.
Associated Press, “Here’s what’s on House Democrats’ agenda if they sweep to power in midterm elections,” October 14, 2026, via PBS NewsHour. Relief proposals under discussion.
Congressional Budget Office, “The Budget and Economic Outlook: 2026 to 2036,” February 11, 2026. Deficit projections.
Committee for a Responsible Federal Budget, “CBO’s February 2026 Budget and Economic Outlook,” February 2026. Interest costs.
U.S. Department of the Treasury, “Daily Treasury Par Yield Curve Rates,” October 26, 2026. 10-year Treasury yield.