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Resilient Through Uncertainty

June 30, 2026

Time to Read: 2 minutes

U.S. policy uncertainty has remained elevated and consumer sentiment has weakened. Even so, the economy has stayed resilient, and because growth has held up better than sentiment and headlines suggest, we continue to forecast 2% U.S. growth in 2026, in line with trend.

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U.S. policy uncertainty — a dependable catalyst for investor anxiety — has remained elevated in recent years, with the Economic Policy Uncertainty Index running well above its long-run average. At the same time, consumer sentiment has deteriorated amid fears of a growth slowdown, which have prompted a reassessment of the outlook for risk assets.

Still, the economic backdrop has remained notably resilient — stronger than many investors and analysts expected — despite policy shocks like tariff changes and government shutdowns.

While the noise around the growth narrative has been loud, it has still been mostly noise. Policy uncertainty and investor unease have been real, but the economy has continued to absorb both. As a result, we reiterate our growth forecast for 2026 of 2%, in-line with trend.

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History of Stocks After the Fed Hikes

Sticky inflation and resilient growth have revived monetary tightening, increasing the risk of higher-for-longer rates and near-term volatility. We still believe economic resilience and strong corporate profits should continue to provide a favorable backdrop for stocks, and would use periods of market weakness to add selectively to equities. Additionally, owning real assets can help hedge against inflation.

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Inflation Is a Global Problem

Resilient economic growth, sticky inflation driven by higher energy prices and continued geopolitical uncertainty are complicating the path back to central-bank price targets. We believe policymakers are likely to adopt a tightening bias but remain data dependent.

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