The Times They Are A-Changin': What the New Fed Means for Aircraft Financing
Mike Smith connects Kevin Warsh's Fed, the dot plot, and a Ron Burgundy reference to explain why the market's biggest challenge right now isn't interest rates it's the disappearance of clarity on where they're headed.
One of my favorite movies of all time is Anchorman. In one of the scenes of that movie, the narrator says, “Bob Dylan once wrote, ‘The Times They Are A-Changin’.” Ron Burgundy had never heard that song, so when he fell, he fell hard.”
That scene comes to mind regularly these days when I think about where interest rates have gone this year, and where things may go in the future. In fact, there are so many unique dynamics at play at once right now. We’ll chew through them periodically through our “The Plane Truth” articles the rest of the year.
As you know, a new chair of the Federal Reserve took the helm in June. Kevin Warsh is now Fed chair, and in the role he’s prioritizing providing less forward guidance than in recent history. For our conversation, let’s look at the “dot plot”. What is the dot plot? Periodically, members of the Fed forecast where they think rates will be headed. All their projections are outlined on a single chart represented by dots …hence the name “dot plot”.
This practice was started in 2012 by then-Chair Ben Bernanke to help the market better understand where the Fed believed interest rates were headed, as we were starting to emerge from the doldrums of the 2008 economic crisis. The dot plot was one example of what became known as “forward guidance,” showing projections of where the economy may be and what the Fed will do given those projections.
Chair Warsh has been clear that he believes the Fed has focused too much on forward guidance (See here: What Dropping Forward Guidance Means For Financial Markets). And further proving this, he abstained from providing a forecast with the most recent dot plot. Exactly what impact this will have on interest rate markets over time remains undetermined and is worth watching.
This week the Fed meets for the Kansas City Fed Economy Policy Symposium in Jackson Hole, Wyoming. During the meeting, the market will be watching what Chair Warsh says (or doesn’t say) as it continues to figure out how much guidance the Fed will provide in the future.
And just like Ron Burgundy, if the market isn’t aware of Bob Dylan’s “The Times They Are A-Changin” it has the potential to fall hard.
FOD and Engine Programs: What Aircraft Owners Need to Know Before Filing a Claim
Tom Hauge has seen a surge in FOD claims in 2026 and wants aircraft owners to know before you call your insurance broker, check your engine program first. It could save your rates for years.
A nasty and expensive three-letter acronym in the aircraft insurance business is FOD…
What Is FOD and Is It Covered?
I have seen a rash of Foreign Object Damage (FOD) engine-related claims thus far in 2026. The first thing that will always come to an aircraft owner’s mind when the repair or overhaul facility tells you that you have FOD damage in your engine: Does insurance cover this? Generally speaking, the short answer is yes – virtually ALL underwriting carriers writing turbine aircraft hull and liability policies in the USA have FOD-related coverages built into their policy forms – coverage, however, being confirmed will typically require defining the ‘occurrence’ of the FOD damage to be within the policy period and within the parameters outlined in the policy.
Check Your Engine Program First
One piece of advice I give to my turbine customers with aircraft enrolled in an engine program is to first check with the program to confirm whether it covers FOD damage. Several engine-related programs, such as Williams TAP Blue, MORE program, and JSSI, include partial or full coverage for FOD damage to engines.
Since the aircraft owner is paying hourly into these engine programs,it sometimes makes more financial sense to submit a FOD claim through their engine program than through their aircraft hull and liability insurance carrier.
Why It Matters for Your Insurance Rates
While the hull and liability carrier certainly will cover most FOD damage within the policy conditions, the future insurability/rates can certainly be impacted if you have a sizeable FOD claim/loss. FOD coverage available through the engine program provider will have little to no direct impact on your hourly engine program rate.
Read the Fine Print
Not all situations are equal here, and not all engine programs cover FOD, so you may ultimately end up with no choice but to file a claim with your hull and liability insurer. It is, however, best to thoroughly review your engine program contract and the coverages under that contract before contacting your aircraft insurance broker. Paying attention to the fine print in the engine program may help you avoid impacts on your insurance landscape with your aircraft’s insurers for years to come.
NBAA - is it worth it?
Dustin Cordier makes a harder case for NBAA membership than "cost of doing business" and shows exactly how Burke Lakefront, bonus depreciation, and a Washington state tax repeal got won by people who showed up before it mattered.
The most common thing I hear about NBAA membership is that it is the cost of doing business, and people say it in the tone they reserve for expenses they wished they weren’t paying. I want to make a stronger case for it than that, because the association is one of the few line items in this industry where what you get back is directly proportional to whether anyone from your operation ever shows up.
Start with Cleveland, since it just resolved.
Mayor Bibb wanted Burke Lakefront closed. That is not an unusual position for a mayor to hold about a waterfront airport sitting on land that developers would happily take off the city's hands. If you have been in this business long enough, you have watched that argument win. On August 14, in Oberlin, FAA Administrator Bryan Bedford said flatly that the FAA is not in favor of closing Burke. Senator Bernie Moreno said there is no scenario in which it closes, and called it absurd for a politician to override the FAA's own analysis. Senator Husted's office said the same thing in more careful language. That is the end of it, practically speaking.
Now look at what those men were holding when they said it. An Ohio DOT study putting Burke at $195 million in direct annual economic activity, 664 jobs, reliever capacity for Cleveland Hopkins, and a training field feeding an industry that cannot produce enough pilots and mechanics. Two letters signed by more than 50 Cleveland-area business, education, and civic leaders. A coalition that had been grinding on this for months, with NBAA in it, and private meetings with the Administrator and both senators well before anybody was standing in front of a camera. The mayor was not beaten by an argument made in August. He was beaten by work finished long before he made his move.
Two more quick examples, because the pattern repeats. Washington state had already enacted a tax on most general aviation aircraft with an April 1 start date, and PNBAA and NBAA pulled in hundreds of members and got it repealed before it ever touched an owner's bill. And when the 2025 tax law brought back 100% bonus depreciation, it left a gap for anyone who had signed a purchase agreement before January 20 but took delivery after that date, which applied to many deals already in motion. NBAA's Tax Committee had the technical position written and published for members before the IRS weighed in. When Notice 2026-11 came out in January, it confirmed what the committee had already documented.
That last one is a great example of how engagement actually works.
The Tax Committee is not lobbyists. It is practicing aviation tax attorneys and CPAs who volunteered, and they had a defensible position on file because they deal with 280F and placed-in-service questions for a living. Same story with the Safety Committee, which ended up seated for ALERT Act implementation rather than reading about it afterward. The association's real asset is not its Washington office. It is a few hundred practitioners who agreed to do committee work, and every one of them got there because somebody met them at an event and made a note.
I sit on the Business Aviation Management Committee, which hosts the Leadership Conference every year. I can tell you that nobody has ever been recruited onto a committee out of a database. It happens in hallways, after sessions, when someone asks a question that makes it obvious they care. If you have people in your operation you are trying to develop into leaders, that is the mechanism, and it does not run without attendance.
Which is the uncomfortable part of the ask. Attending a trade show does not feel like advocacy. It can feel like a hotel bill in Las Vegas and three days away from an operation that needs you, and I am not going to pretend otherwise. But NBAA's leverage on Capitol Hill is a function of how many operators it can credibly claim and how many of those it can reach and mobilize inside of a week when something lands on one of us. Dues alone do not build that. Bodies in rooms do. BACE is October 20 through 22 in Las Vegas. If you are an owner, look at the whole week rather than the show floor, because the Tax, Regulatory and Risk Management Conference runs the 18th and 19th and puts you in a room with the same attorneys who write the positions the IRS eventually responds to. Aircraft Connection is out at Henderson on the 20th and 21st with PDP courses running alongside all of it.
And if you are thinking about leadership development rather than tax, our Leadership Conference is February 8 through 10 in Tucson, with a one-day PDP course on building a personal leadership vision on the 8th. That one is smaller and, honestly, better for the kind of conversations that change how somebody runs a department.
Go once with the intent of finding out who is in the room. If you have been going for years and treating it as a vendor tour, take a different pass this time and sit in on an advocacy session. The wins above exist because a few hundred people did exactly that, and the next round depends entirely on whether we keep enough of them doing it.