US Macro: FAQs To Forecasts

The UBS 2026 US economic outlook anticipates solid 1H growth followed by moderate 2H slowing. The Fed is expected to remain on hold until 2027 due to persistent inflation pressures.

Key Takeaways

• 1.US growth is expected to remain near 2% in 2026, supported by strong private demand and fiscal tailwinds, with moderation expected in the second half of the year.
• 2.The Federal Reserve is expected to maintain a wait-and-see stance with no rate cuts until 2027 due to persistent inflation and supply shocks.
• 3.AI investment is currently driving narrow strength in equipment and software, with broadening participation expected in broader manufacturing sectors.

Table of Contents

• Macro outlook: Solid 1H26 growth, 2H26 moderation as Fed stays on hold
• Growth: Multiple drivers are enough to offset negative oil impact
• Oil: Prices could weigh on growth, but starting conditions were strong
• Tariffs: Trade policy effects are expected to taper
• Labor: May job growth was strong, and unemployment is stabilizing further
• Labor: Limited changes in the no-hire, no-fire labor market
• Consumption: Remains solid, aided by wealth effects and tax cuts
• Investment: Stronger PMIs show investment may broaden out more
• Inflation: Headline inflation has surpassed 4% due to the oil shock
• Rates: Cuts are more likely than hikes; new Fed chair adds uncertainty
• 10 US Economy FAQs

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