U.S. Economic Outlook

The U.S. economy maintains growth momentum in mid-2026, though Fed policy is expected to remain neutral as officials await data on labor market overheating.

Key Takeaways

• 1.The Fed is moving toward a more neutral policy stance, with no immediate impetus for rate hikes or cuts.
• 2.Economic growth momentum remains solid in the first half of 2026, but tailwinds like tax cuts are fading.
• 3.Labor market conditions remain broadly aligned with full employment estimates, despite concentration in specific sectors.

Table of Contents

• Key Themes
• Sector Analysis
• Personal Consumption Expenditures (PCE)
• Investment: Equipment, Intellectual Property Products, and Inventories
• Investment: Residential
• Investment: Nonresidential Structures
• Net Exports & Trade
• Labor Market
• Inflation
• Fiscal Policy
• Monetary Policy & Interest Rates