Key Takeaways
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- Goldman Sachs forecasts above-consensus U.S. growth in 2026 with moderating inflation.
- The bank expects two 25 bp Fed rate cuts in June and September.
- Growth drivers are shifting toward productivity and AI, not labor supply.
- Business investment is set to lead GDP as policy uncertainty eases.
What Happened?
Goldman Sachs released its 2026 U.S. economic outlook, projecting resilient growth supported by tax cuts, rising real wages, and household wealth gains. The bank expects GDP growth of 2.5% on a Q4/Q4 basis (2.8% full-year), with core PCE inflation easing to 2.1% by year-end and unemployment stabilizing around 4.5%. Given a more uncertain labor market backdrop, Goldman anticipates the Federal Reserve will deliver two quarter-point rate cuts in mid and late 2026.
Why It Matters?
Goldman’s outlook is more optimistic than consensus and reinforces the soft-landing narrative. Crucially, the composition of growth is changing: productivity gains—boosted by AI adoption—are expected to replace labor-force expansion as the primary driver, especially with lower immigration. This supports a scenario where growth remains strong even as inflation cools, giving the Fed room to ease without reigniting price pressures. For investors, the forecast favors risk assets, capital spending, and sectors leveraged to productivity and technology.
What’s Next?
Markets will watch whether productivity gains materialize fast enough to offset slower labor growth and whether AI-driven efficiency leads to jobless growth. Inflation data will be key in validating Goldman’s call for rate cuts, while fiscal and trade policy ahead of midterm elections could shape confidence and investment. If Goldman’s outlook holds, business investment should emerge as the dominant growth engine in 2026, reinforcing U.S. economic outperformance versus peers.
