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 gradually cool down.

It is projected that the inflation rate will fall to slightly below 2.5% in 2026 and return to the Federal Reserve’s 2% target level in 2027. Tariff-related price pressures are expected to be only temporary. It is forecasted that U.S. GDP growth next year will be about 2.25%, significantly faster than the projected 1.5% growth for 2025, primarily due to favorable fiscal policies, good financial conditions, 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.”

Federal Reserve Bank of New York

The Federal Reserve Bank of New York is one of the twelve regional Reserve Banks in the United States, established in 1914 following the Federal Reserve Act of 1913. It is the most influential of the regional banks, responsible for implementing monetary policy, regulating financial institutions, and managing the world’s largest gold vault, which holds gold reserves for many nations and international organizations.

U.S. economy

The U.S. economy is the world’s largest, evolving from its 18th-century agrarian roots into a post-industrial powerhouse driven by services, technology, and finance. Its history is marked by expansion, innovation, and cycles of boom and bust, heavily influenced by events like industrialization, the Great Depression, and the rise of global trade.

Federal Reserve

The Federal Reserve is the central banking system of the United States, established by Congress in 1913 with the Federal Reserve Act to provide the nation with a safer, more flexible, and more stable monetary and financial system. It performs key functions such as conducting monetary policy, supervising and regulating banks, and maintaining financial stability.