Institution: U.S. Inflation Expected to Slow to 2.4%, Creating Conditions for Fed to Cut Rates Twice Next Year

Odaily reported that Oxford Economics expects the U.S. economy to maintain robust growth from 2026 to 2027, primarily driven by AI investments, tax incentives, and spending by high-income groups. The institution forecasts U.S. GDP growth of 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 investments in non-tech sectors 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 Fed to cut rates twice next year. A decline in immigration and weaker housing demand may further alleviate inflationary pressures. Overall, the fundamentals of the U.S. economy remain strong, but it remains highly sensitive to stock market performance. (Jin10)