Brent Beardall, President and CEO of WaFd Bank, presented the Mid-Year Economic Forecast for the Bellevue Chamber of Commerce, delivering good news on the national economy while warning that Washington state’s financial direction poses risks, ones that hit close to home for Eastside businesses and investors.
National Economy
The broader U.S. economy is holding up well. Growth in the first quarter came in at 1.5%, with projections topping 2% for the rest of 2026, even amid ongoing uncertainty around tariffs and trade. The rapid expansion of artificial intelligence and computing infrastructure is playing a significant role, contributing nearly 1.5 percentage points to overall growth. The stock market has also performed strongly, with the S&P 500, which tracks 500 of the largest U.S. companies and is widely used as a measure of overall market health, up nearly 11% so far this year.
The Federal Reserve
The Federal Reserve has managed to bring inflation down from a peak of around 7% without triggering a recession or widespread job losses. Unemployment remains near 4.25%. New Fed Chair Chairman Warsh recently signaled that interest rate cuts are off the table for now, a move Beardall supported, pointing out that the Fed’s target of 2% inflation hasn’t actually been reached in over a decade.
What It Means for Washington — and Bellevue
This is where the outlook darkened. Washington state now ranks among the worst in the country on sales, business, capital gains, and estate taxes, a reality that affects every business operating on the Eastside. The state’s operating budget has also ballooned from $33 billion to $78 billion since 2014, a 48% increase even after accounting for inflation and population growth.
The warning signs are showing up in the market. Home values in Washington are declining faster than anywhere else in the country. A major office building in downtown Seattle recently sold for about $280 per square foot, a fraction of what it would cost to build today. And three members of WaFd’s own board have moved their legal residency out of state, a personal signal Beardall said concerned him deeply.
For Bellevue’s business community specifically, these trends matter. The same tax environment and budget pressures Beardall described apply directly to Eastside employers, property owners, and the executives and tech workers who call Bellevue home.
WaFd Bank and Housing
On a brighter note, WaFd had a strong quarter, with loans up 12%, earnings per share up 26%, and a solid return for investors. On housing, mortgage rates are expected to stay in the mid-6% range, and competition from large institutional buyers continues to make homeownership harder for everyday buyers.
Looking ahead, Beardall projected interest rates holding near 4.25% and expects the gap between short- and long-term rates to continue narrowing.
