November 2026 Commentary and Economic Outlook

The commentary argues that restrictive monetary policy will slow growth through a housing recession while official inflation measures overstate underlying price pressure.

• Third-quarter GDP growth of 3.4% was driven by a 1% contribution from government spending and 3.1% from consumers, while net investment contributed only 0.3% as a 3.3% decline in housing investment offset imported technology spending.
• InfraCap forecasts economic growth of 1.5% in 2027, with government spending declining after the Iranian war, consumer spending contributing 1.6%, and housing investment weakening under hawkish Federal Reserve policy.
• InfraCap’s CPI-R tracked September inflation at 1.36% year over year versus 2.57% for Core CPI, while its real-time shelter index rose 0.30% versus 3.15% for official Core CPI shelter.
• Adjusted Core PCE rose 0.22% in September and 2.26% year over year, compared with reported Core PCE readings of 0.32% and 3.12%; the commentary attributes the gap to imputed consumption, imputed prices and medical-care methodology.
• The authors are neutral on equities, targeting 7,400 to 8,000 for the S&P 500 by year-end 2026, based on 19 times 2027 earnings, a 10-year Treasury yield of 4.75% to 5.00%, and WTI crude at $80 to $100 per barrel.
• The 30-year mortgage rate above 7.6%, following a 150-basis-point increase, is expected to produce a major housing recession, although technology investment and AI infrastructure should prevent a full economy-wide recession.

Takeaway: InfraCap expects housing weakness and high rates to cap equities and slow 2027 growth, while its proprietary inflation measures support easier policy and replacing Core PCE with Core CPI as the Federal Reserve’s preferred gauge.