Institution: US Inflation Expected to Slow to 2.4%, Creating Conditions for Two Fed Rate Cuts Next Year

Odaily According to Oxford Economics, the US economy is expected to maintain robust growth from 2026 to 2027, primarily driven by AI investments, tax incentives, and spending by high-income groups. The institution forecasts US GDP growth at 2.8% in 2026 and 2.3% in 2027, following an annualized GDP growth rate of 4.4% in the third quarter of 2025. AI-related investments and non-tech sector investments are on the rise, productivity continues to improve, and stock market gains and tax cuts are supporting consumer spending. Inflation is expected to slow to 2.4%, which will create conditions for the Federal Reserve to implement two interest rate cuts next year. A decline in immigration and weaker housing demand may further alleviate inflationary pressures. Overall, the fundamentals of the US economy remain strong, but it remains highly sensitive to stock market performance. (Jin10)