Market Data

The U.S. economy entered 2026 on relatively stable footing, with steady growth, a resilient labor market, and productivity gains from AI and technology helping to offset the impact of elevated interest rates. Consumers and businesses remain broadly healthy, though the risk backdrop has grown more complex: the ongoing war in Ukraine, military involvement in Venezuela, geopolitical tensions with China, and the Iran conflict are introducing potential oil and commodity price shocks, while high asset valuations, heavy government deficit spending, and evolving trade negotiations add further uncertainty. These factors could produce stickier inflation and higher interest rates than markets currently anticipate. Despite these headwinds, the broader outlook supports cautious optimism, with the economy positioned for continued, if measured, expansion as the year progresses.