On October 15, 1929, Yale economist Irving Fisher made a bold prediction: he claimed stock prices had reached a “permanently high plateau.” Just weeks later, the stock market crashed, leading into the Great Depression. Fast forward to today, many economic forecasts still miss the mark. For instance, during the pandemic, many expected a prolonged recession. However, it turned out to be the shortest in U.S. history.
Recent years have shown that economic predictions can often be overly pessimistic. Despite fears of recession during interest rate hikes in 2022 and tariff announcements, the U.S. economy has remained resilient. Yet, the growth has been uneven, with wealthier Americans and AI-centric businesses thriving, while many lower-income Americans continue to struggle.
Experts remind us to view economic forecasts with caution. Still, it’s valuable to look ahead. Here’s a glimpse into what some professional forecasters believe for 2026.
Most experts agree that a recession is unlikely this year. They expect moderate growth, but it’s likely to follow that same K-shaped trajectory. Wealthier households will fuel growth, while others may not see much improvement.
Predictions for 2026:
The Economist warns of challenges such as tariffs and high inflation but believes the economy will show resilience. They predict “mediocre growth” as these issues impact the economy.
Goldman Sachs offers an optimistic view, predicting a 2.6% GDP growth in 2026. They attribute this positive outlook to tax cuts and easier financial conditions, helping consumers spend an estimated extra $100 billion in tax refunds.
Bank of America echoes this optimism, expecting above-consensus GDP growth for both the U.S. and China. They believe fears of an AI bubble are overstated.
J.P. Morgan has a more cautious take, estimating a 35% chance of recession in 2026. They acknowledge ongoing market uncertainties like inflation and a weak labor market.
A report by EY indicates that K-shaped growth will continue. They expect uneven consumer spending, with wealthier households driving the economy while lower-income families face pressures like high prices and slow wage growth.
The Federal Reserve Bank of St. Louis recently analyzed opinions from professional forecasters about the economy. Their findings show a wide range of predictions, especially regarding GDP growth and unemployment rates. The lack of consistent government data could contribute to these varying forecasts.
Overall, while most forecasters don’t anticipate a downturn, the outlook remains mixed. Economic growth might continue but will likely favor those at the top, leaving many behind.
No matter what happens in 2026, keeping a pulse on economic developments will be crucial for everyone.
