Key Points
- Major banks are forecasting “moderate growth” for the U.S. economy in 2026.
- A “K-shaped” recovery will continue, with the wealthy spending while others struggle.
- The AI investment boom is a major driver of economic optimism.
- JPMorgan sees a 35% chance of a recession due to high inflation and a weak job market.
As we head into the new year, the world’s largest banks are releasing their 2026 forecasts. The overwhelming consensus is “moderate growth,” a vague term that doesn’t provide meaningful insight. Experts from Goldman Sachs, Bank of America, and others are playing it safe, emphasizing uncertainty and downside risks without making any bold claims.
Most large firms expect the U.S. economy to continue its “K-shaped” recovery. This means that wealthy consumers and companies investing in artificial intelligence will sustain economic growth.
However, lower-income families will continue to struggle with high prices and expensive loans. Ernst & Young noted that consumer spending will likely be uneven, with high-income consumers driving most of the activity.
Bank of America is slightly more optimistic, projecting that the U.S. economy could grow at a 2% pace by the end of the year. They credit new tax laws and the ongoing AI boom for this sunny outlook. Goldman Sachs agrees, saying the U.S. will likely grow faster than other major countries, though it warns that AI could eventually slow job growth.
The big question on everyone’s mind is interest rates. S&P Global expects the Federal Reserve to cut rates twice in the second half of 2026. This would make borrowing cheaper and could give the economy a small boost.
However, JPMorgan is more pessimistic. They estimate the chance of a 2026 recession at about 35%, or one in three. They worry that “sticky inflation” and a cooling job market could tip the economy into a downturn.
Ultimately, these forecasts are designed to be conservative. No one at a major bank wants to be the person who gets a prediction spectacularly wrong. So, while these reports are worth reading, they should be taken with a grain of salt. For 2026, the big institutions are telling us to expect… well, not much of anything specific.
