The president of the Federal Reserve Bank of New York said on Monday that after a year of uncertainty, the U.S. economy is expected to regain growth momentum, while inflation and the labor market will continue to cool gradually.
Inflation is projected to fall to just below 2.5% by 2026 and return to the Federal Reserve’s 2% target in 2027. Tariff-related price pressures are expected to be temporary. U.S. GDP growth is forecast to be about 2.25% next year, a significant acceleration from the projected 1.5% growth in 2025, primarily due to favorable fiscal conditions, a supportive financial environment, and investments in artificial intelligence.
Regarding employment, it was stated: “I expect the unemployment rate to rise to around 4.5% by the end of this year, reflecting some additional impact from the government shutdown.”
