Are We Headed For a ‘Soft Landing’ or a Recession in 2026?

Economic Outlook - Most economists expect the U.S. economy to grow in 2026, driven by the "One Big, Beautiful Bill" Act and increased AI spending [2][5] - A Philadelphia Federal Reserve survey indicates an average GDP growth rate of 1.8% for 2026, with inflation projected to slow to a 2.6% annual rate by Q4 2026 [6] - JPMorgan forecasts a growth rate of around 3% in the first half of 2026, tapering to between 1% and 2% later in the year, with inflation expected to decrease from over 3% to near 2% by year-end [7] Inflation and Economic Conditions - Inflation is anticipated to remain elevated above the Federal Reserve's 2% target, raising questions about the feasibility of a "soft landing" [4][5] - Wells Fargo suggests that a softer labor market and potential tariff relief could help lower inflation, although it is still expected to stay above the Fed's target [9] - Analysts note that while economic growth may start strong in early 2026, it could slow later due to rising tariffs and tighter immigration policies [9][8] Market Sentiment - Despite economists' optimism, public sentiment reflects uncertainty, with a predictions market indicating a 35% chance of a recession by the end of 2026 [10]