Big banks’ 2026 economic forecasts, in plain English

Forecasts for 2026 are rolling in from major banks and financial institutions, and if you’re looking for bold predictions, you won’t find them here. The consensus is “moderate growth” with a side order of “uncertainty” — the institutional economists’ version of word salad.

There’s good reason for their caution and conservatism, of course. Institutions favor business as usual; you don’t rise to the top of them by making bold claims that may later be proven dead wrong. Given their incentives, it’s wiser for experts in these positions to hedge every claim and emphasize downside risks without committing to any particular view. What’s more, it’s genuinely true that no one knows the future — something true experts, in every field, will be the first to tell you.

All that said, it’s still worth hearing directly from the experts themselves. Here’s what the biggest players in finance and banking are saying about 2026 — however noncommittally.

Accounting giant Ernst & Young expects U.S. growth to slow modestly next year, with wealthy consumers and AI-related investment driving growth, even as higher prices and borrowing costs weigh on lower-income households — all of which already grabbed headlines in 2025.

In a recent report, the firm warned that “consumer spending is likely to remain uneven: high-income households will continue to drive outlays while lower-income families will remain under pressure due to higher prices, slower wage and job growth, and elevated borrowing costs.”

Bank of America Global Research expects the U.S. economy to be growing at roughly a mid-2% pace by the end of 2026. The “bullish” forecast rests on tax-code changes designed to boost investment, plus continued strength in consumer spending and AI-related business spending.

Goldman Sachs’ research likewise expects the U.S. to outperform most other large economies, even as AI adoption may weigh on job growth. The firm projects global GDP growth of about 2.8% in 2026, slightly ahead of broader forecasts, and notes that the end of the government shutdown is likely to create a rebound effect early in the year.

Unsurprisingly, interest rates are another central theme across forecasts. S&P Global expects two 25–basis-point rate cuts in the second half of 2026. Lower rates would likely provide some support for borrowing and investment, though most forecasters remain cautious about how quickly financial conditions (read: high borrowing costs) might ease.

Not all outlooks are uniformly upbeat. JPMorgan Global Research puts the probability of a U.S. and global recession in 2026 at roughly 35%, citing “sticky inflation” and the slowing labor market. So, even in its baseline scenario, the bank sees a meaningful risk of downturn — effectively one-in-three odds.

Other banks strike a more agnostic tone. Morgan Stanley describes the outlook as one of “moderate growth with a wide range of possibilities” — i.e., no contraction and no boom, either. It’s phrasing that covers essentially all likely outcomes, and in fairness, one that appears in some form across most 2026 forecasts.

In fact, “moderate growth” may be the closest thing to a consensus view. Most experts see the economy expanding in 2026, and nearly all emphasize “uncertainty,” urging businesses and investors to plan for multiple scenarios, as if business planning ever called for anything else.

The problem isn’t that 2026 is hard to forecast — it’s that institutional forecasts are designed not to be wrong in ways that get remembered.

For investors and businesses, that means treating these forecasts less as insight and more as a vibe check on what large institutions are willing to say publicly. And for 2026? The answer is not much.