Interview, Fireside Chat
2026 Outlook: The U.S. Is the Place to Be
- The Federal Reserve policy rate is expected to remain calibrated within a 3.5% to 3.75% range with a two-year rate at 3.5%, maintaining a bias toward easing that could intensify if economic output weakens.
- Inflation is projected to continue moderating toward a lower glide path despite tariff policies slowing the pace of decline.
- A real weakening is currently observed in the labor market, with potential for further cooling, the extent of which remains uncertain.
- The U.S. dollar is anticipated to cease depreciating following a recent appreciation period, supported by continued global investment inflows.
- The 2026 AI narrative is expected to shift from hyperscaler supply and data center expansion to enterprise adoption focused on efficiency, productivity, and pattern recognition, though current experimental results are not yet perfect.
- Affordability is identified as a primary theme for 2026, with the administration expected to implement measures to address related economic narratives.
- The economic shock from tariff policy is viewed as a one-time adjustment that will recede, with the economy projected to perform strongly in 2026 supported by established regulatory groundwork.
- Any widening of credit spreads is expected to function as a self-correcting mechanism to curb excessive build-out in response to high market supply.
- Global capital markets are forecast to remain resilient, attributed to their depth, liquidity, and capacity to adapt swiftly to new information and shocks.
- The administration is expected to continue operating with high speed over a relatively short period, although specific duration details are not provided.