US economy heads into 2026 in an unusual place

The US 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.

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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 US 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 labour 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.