Overview
- New tax provisions from the One Big Beautiful Bill are set to lift spending through fatter refunds and lower withholding, with Goldman Sachs estimating about $100 billion in extra refunds in the first half of 2026.
- Full expensing and ongoing data‑center buildouts are poised to extend AI‑driven capital spending, though forecasters say productivity gains may precede broad hiring.
- The tariff shock of 2025 is projected to crest in early 2026 and then fade, easing price pressures as firms and consumers adjust to a higher but more stable effective tariff rate.
- Late‑2025 Federal Reserve rate cuts and potentially easier financial conditions are expected to support activity, even as inflation remains elevated and could constrain further easing.
- Growth projections diverge but remain above trend, with Goldman Sachs forecasting about 2.6% real GDP in 2026 and JPMorgan at 1.8%, while analysts see unemployment stabilizing around 4.5% before improving later in the year.