The U.S. economy heads into 2026 in an unusual place: Inflation is down from its peak in mid-2022, growth has held up better than many expected, and yet American households say that things still feel shaky. Uncertainty is the watchword, especially with a major Supreme Court ruling on tariffs on the horizon.

To find out what’s coming next, The Conversation U.S. checked in with finance professors Brian Blank and Brandy Hadley, who study how businesses make decisions amid uncertainty. Their forecasts for 2025 and 2024 held up notably well. Here’s what they’re expecting from 2026 – and what that could mean for households, workers, investors and the Federal Reserve:

The Fed closed out 2025 by slashing its benchmark interest rate by a quarter of a percentage point – the third cut in a year. The move reopened a familiar debate: Is the Fed’s easing cycle coming to an end, or does the cooling labor market signal a long-anticipated recession on the horizon?

While unemployment remains relatively low by historical standards, it has crept up modestly since 2023, and entry-level workers are starting to feel more pressure. What’s more, history reminds us that when unemployment rises, it can do so quickly. So economists are continuing to watch closely for signs of trouble.

So far, the broader labor market offers little evidence of widespread worsening, and the most recent employment report may even be more favorable than the top-line numbers made it appear. Layoffs remain low relative to the size of the workforce – though this isn’t uncommon – and more importantly, wage growth continues to hold up. That’s in spite of the economy adding fewer jobs than most periods outside of recessions.

Gross domestic product has been surprisingly resilient; it’s expected to continue growing faster than the pre-pandemic norm and on par with recent years. That said, the recent shutdown has prevented the government from collecting important economic data that Federal Reserve policymakers use to make their decisions. Does that raise........

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