US economy poised for stronger 2026 as headwinds fade

A see-saw year for the US economy in 2025 looks set to give way to a stronger 2026 thanks to tailwinds from President Donald Trump’s tax cuts, less uncertainty around tariffs, the ongoing artificial intelligence boom and a late-year run of interest-rate reductions from the Federal Reserve.

Among the biggest drivers of a pickup in growth, economists say, are fatter tax refunds and smaller tax withholdings on paychecks that are expected to provide a lift to consumer spending, the backbone of the American economy.