Wells Fargo Economics Research Hub

Wells Fargo Economics highlights a resilient U.S. macro environment characterized by steady Q1 GDP growth of 2.0%, supported by AI-driven capital expenditures and fiscal stimulus. However, this resilience is accompanied by persistent inflationary pressures, with a projected 0.4% rise in the PCE deflator and core PCE inflation now forecasted to reach 3.1% by year-end. These inflationary signals, compounded by rising energy shocks and tech-sector costs, have prompted a shift in the Federal Reserve's outlook toward a prolonged 'wait and see' approach. Consequently, Wells Fargo anticipates that the first of two projected 2026 rate cuts will be delayed until October. On the consumer front, elevated mortgage rates near 6.5% are expected to maintain pressure on household spending and the housing market. Internationally, the firm tracks divergent trends, including a projected 4.7% rise in Australia’s headline CPI and solid 1.0% Q1 GDP growth in Brazil, which is expected to moderate under restrictive monetary policies. Overall, the research suggests a complex landscape where technological tailwinds balance out the drag from high interest rates and global geopolitical risks.