US Economy to Grow Slightly Amid Persistent Inflation in 2026
Washington, D.C., Monday, 24 November 2025.
Economic growth in the US is expected to rise modestly in 2026, with inflation remaining a key concern, as the Federal Reserve slows its rate cuts.
Economic Growth Projections for 2026
The U.S. economy is forecasted to grow by 2% in 2026, a slight increase from the 1.8% predicted in October 2025. This growth is attributed to increased personal spending and business investment, although new import tariffs could offset growth by at least 0.25 percentage points [1].
Inflation and Employment Outlook
Inflation is projected to end 2025 at 2.9% and decrease slightly to 2.6% in 2026. Tariffs are expected to contribute significantly to this inflation rate, accounting for up to 0.75 percentage points [1]. Employment growth is anticipated to remain modest, with job creation averaging around 64,000 per month, and the unemployment rate reaching 4.5% by early 2026 [1].
Federal Reserve’s Monetary Policy
The Federal Reserve plans to implement a quarter-point interest rate cut in December 2025, followed by an additional half-point reduction throughout 2026. These measures aim to achieve a neutral monetary policy stance, balancing growth and inflation risks [1].
Treasury Secretary’s Optimism
U.S. Treasury Secretary Scott Bessent has expressed confidence that the U.S. will avoid a recession in 2026, citing President Trump’s tariff and trade deals as key factors. Bessent anticipates a ‘very strong, noninflationary growth economy’ for the coming year [2].
Challenges and Opportunities Ahead
Despite optimistic forecasts, the U.S. economy faces challenges, including potential recession pockets in interest rate-sensitive sectors such as housing. However, stimulus measures, including a proposed $2000 check for 150 million Americans, could boost consumer spending and offset some inflationary pressures [3][4].