JPMorgan Asset Management says an AI investment surge and resilient consumer
spending will sustain economic expansion. Firms' ramp-up of AI infrastructure
spending is boosting momentum, while rising stock and house prices are creating
a wealth effect that supports high‑income consumption. Chief global strategist
David Kelly said the economy should strengthen by mid‑year, with income‑tax
refunds and AI‑related spending as key near‑term growth drivers. Continued
growth into Q4 hinges on further Washington fiscal stimulus; JPMorgan's baseline
assumes Democrats retake the House, which it says would reduce the probability
of new fiscal stimulus in 2027. Assuming tensions in the Strait of Hormuz ease,
Kelly expects inflationary pressures to moderate through the rest of 2026 and
into 2027 as energy costs fall, housing inflation cools and wage growth
moderates. The team does not forecast a recession.
