This August edition of the Stonebridge Economic Outlook examines an economy that has performed somewhat better than previously expected but continues to face significant uncertainty. It highlights the key factors shaping the forecast, including economic growth, consumer spending, labor market trends, inflation, and the challenges facing the Federal Reserve.
Key Takeaways:
- Economic growth is expected to be somewhat stronger than previously forecast, although underlying labor market conditions and income growth remain areas of concern.
- Headline inflation is expected to moderate as energy prices decline, while core inflation is likely to remain elevated due to ongoing tariffs and other macroeconomic policies.
- The Federal Reserve remains caught between persistent inflation and a weakening labor market, making the outlook for monetary policy increasingly uncertain.
Providing his new forecast, our Chief Economist, Daniel E. Laufenberg, Ph.D., details what lies ahead for 2026.