| This April edition of the Stonebridge Economic Outlook assesses a U.S. economy increasingly shaped by policy shocks, geopolitical risk, and unsettled trade dynamics. It outlines the key assumptions behind the forecast and highlights how inflation, interest rates, employment, and consumer spending may evolve as uncertainty remains unusually elevated.
Key Takeaways:
- Policy shocks (war, tariffs, and fiscal decisions) are making the outlook unusually volatile and harder than normal to forecast.
- Elevated oil prices and tariffs are expected to keep price pressures higher for longer, limiting how soon rate cuts are likely.
- Consumer demand has some support from transfer income and the wealth effect, but slower real income gains and a gradually higher unemployment rate point to softer GDP and PCE growth.
Providing his new forecast, our Chief Economist, Daniel E. Laufenberg, Ph.D., details what lies ahead for 2026.
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