What's next for the economy in 2026 – and it depends on who you ask

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According to experts, the prevailing opinion about what will happen for the US economy in 2026 is complete uncertainty.

Overall, financial institutions and economists held a relatively positive outlook for growth in 2026 – although they warned that a number of factors could hinder this.

In the last one year, there has been a trade war between President Donald Trump Due to which there were fluctuations in the stock market wildly, While their mission is to deport millions of undocumented immigrants the labor market shrank And Social Security revenue decline,

Trump’s tariff policies are also US domestic costs increased An estimated $1,100 in 2025, according to the nonpartisan group The Tax Foundation.

Some finance experts appear cautiously optimistic that economic growth will remain steady, even if slow. But investment in artificial intelligence is unknown.

Stocks performed relatively well in 2025, although they experienced a decline due to Trump's trade wars — Stocks performed relatively well in 2025, although they experienced a decline due to Trump’s trade wars ,AFP via Getty Images,

Economic experts rely on trends in gross domestic product, employment levels, consumer prices, inflation and other economic markers to make their projections.

Organization for Economic Cooperation and DevelopmentA group made up of 38 countries, including the US, predicts a slowing of 1.7 percent in real gross domestic product next year, citing sluggish employment growth, a slowdown in immigration, rising tariffs and government cuts in non-defense, discretionary spending.

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The economic group warned that “fiscal policy is on an unsustainable trajectory” and “the full impact of the tariff increase… is likely not yet felt.”

Some financial institutions took a more positive outlook for US real GDP – the percentage change in the country’s economic output, adjusted for inflation.

Royal Bank of Canada Wealth Management Forecast An increase of 2.2 percent next year. S&P Global Inc. Prediction Real GDP growth 2 percent But it cautions that outlook by saying “consumer spending growth will reach a cycle low over the next two years.”

Morgan Stanley to some extent Vaguely predicted “moderate growth.” in 2026 with a range of possibilities, but suggested GDP could grow 3.2 percent. While the bank expressed positivity toward AI investment, it warned that other factors, such as tariffs and immigration, could impact the economy more than expected.

With tariffs expected to increase the cost of consumer goods, economists are looking at shoppers' spending habits to determine how badly the tariffs are affecting households. — With tariffs expected to increase the cost of consumer goods, economists are looking at shoppers’ spending habits to determine how badly the tariffs are affecting households. ,getty images,

Consumer spending and price trends are also key markers for determining how confident households are feeling in the economy. More spending shows that people are able to buy goods, which boosts the economy and job market.

Many have been waiting with bated breath in recent months to see how the tariffs will affect consumer prices.

“The economic and market impact of the tariffs may be more manageable than investors feared in April,” JPMorgan Wealth Management said. Its 2026 outlook. “Inflation has remained relatively contained, while consumer spending and corporate earnings have proven resilient.”

The Supreme Court is currently considering whether to allow the President to impose sweeping tariffs on nearly all of America’s trading partners., Whatever the court decides will change the financial institutions’ results for 2026.

In April, President Donald Trump imposed sweeping tariffs on nearly every US trading partner, leading economists to worry that consumer prices would skyrocket. ,AP,

For many investors, the boogeyman of 2026 is the so-called AI bubble.

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There is widespread concern that financial investment in the high-tech sector is due to speculative excitement, and the practical application of the technology is not at the point where it can generate real profits.

If the bubble were to “pop” – as happened during the dot.com boom and the subprime mortgage crisis of 2008 – it could trigger a negative economic reaction, sending the stock market crashing, reducing companies’ profits, and forcing consumers to pull back spending, and much more.

Whether or not There is an AI bubbleAnd if it bursts, then it is a matter of debate.

JPMorgan is confident there is no AI bubble, but has warned investors to curb their enthusiasm about the developing technology.

Sam Altman, founder and CEO of OpenAI, warned that an AI bubble was likely to form – a concern that has been raised by tech investors and predicted that there could be economic disruption if it 'popped'. — Sam Altman, founder and CEO of OpenAI, warned that an AI bubble was likely to form – a concern that has been raised by tech investors and predicted that there could be economic disruption if it ‘popped’. ,getty images,

“In our view, physical, social and political constraints on AI expansion should act as a moderating effect, helping to curb excess investor enthusiasm and giving labor markets more time to adjust to the potential disruption,” JPMorgan. wrote,

Bank of America Analyst Believes that the current boom in the technology sector is “still on solid ground” and does not replicate previous bubbles. “In our view, concerns about an impending AI bubble are exaggerated, and we expect AI investment to continue growing at a solid pace into 2026,” Candace Browning, head of global research at Bank of America, said in a statement.

But Sam Altman, who has been at the forefront of the industry as CEO of OpenAI, the creator of ChatGPIT, made a more worrying point earlier this year.

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“Are we in a phase where investors overall are extremely bullish on AI? My view is yes.” Altman said The Verge in August.

Additionally, Altman believes that AI is “the most important thing to happen in a very long time.”