US Economy Expected to Remain Resilient in 2026 despite Inflation and Unemployment Concerns

20 days ago

Parkev Tatevosian, CFA

"I don't expect a high probability of a recession. I don't expect a high probability of a crash in either the economy or the stock market. I see the economy and the stock market as being resilient. I see the central bank, the Federal Reserve has room to lower interest rates to fight this increasing unemployment, to slow down the increase in unemployment. And I think they have a lot of power to increase the pace of stimulus they can add to the economy by lowering interest rates, by quantitative easing, and other tools they have at their disposal should they need to use that to fight off the increase in unemployment."

The speaker forecasts a resilient US economy in 2026 despite rising inflation and modestly higher unemployment. He emphasizes that the Federal Reserve has the capability to deploy monetary stimulus measures, like lowering interest rates and quantitative easing, to counteract economic headwinds. This macro outlook is built upon broader confidence in market fundamentals and strong underlying labor market conditions, even as geopolitical and tariff-related risks persist.