Name: Top economic factors to watch in 2026
Uploaded: 2025-12-26T16:51:21.168Z
Duration: 3 min 57 s
Description: CNBC’s Steve Liesman reports on the top economic factors to watch next year.

CNBC’s Steve Liesman reports on the top economic factors to watch next year.

Economic experts anticipate a mixed outlook for 2026, with the Federal Reserve likely to maintain current interest rates through the first half of the year before considering cuts around mid-year. Consumer spending remains robust despite low sentiment, supported by healthy balance sheets, low unemployment, and anticipated larger tax refunds.

However, uncertainties persist, including muted wage and job growth, the resumption of student debt repayments, and the unclear impact of accelerated corporate depreciation rules. The latter is seen as a potentially significant driver of business investment beyond the technology sector, depending on how widely it is adopted once regulatory guidance is clarified.

Top economic factors to watch in 2026

Well, we're going to start with the econ outlook for next year. As the street debates the path for the Fed following GDP earlier in the week, let's bring in CNBC senior economics reporter Steve Leisman. Steve, it's great to have you on. And let's start right there. The economic outlook for 2026. There's something for the bulls. There's something for the bears. We're talking to Torsten Slock from Apollo last hour, and he was basically saying the economic, the economy could be poised to be much stronger than people are anticipating. Your thoughts? Yeah, I think that's likely the case, at least in the first half. It's really the tale of two halves. Let me start off talking about the Fed. And there's two different outlooks here. If you look at the probabilities, what you see is they see the Fed on pause through most of the first half of next year. And that may be because, by the way, there's the December 26 Fed Funds Outlook, kind of shows you where we're going, 307. So where are we now? 362. So if you look at the probabilities sort of meeting by meeting, January is very low probability of a rate cut. And then you get into April, it increases. And then by June, you have that first cut really built in, April or June, built in for the year. And then, as you saw, you get down to 307 eventually. So you have the new Fed guy comes in, a new Fed person will come in. And right now, there's an expectation that they do some cutting, Morgan, but not a whole lot. And that's because of the strength of the economy. Let's talk a little bit about the consumer, because it does, and this was my own experience. Everywhere I went, it seemed like people were spending money, places were busy, but there does seem to be a very negative sentiment out there among the consumer. So how to match the two, which seem to be a little bit bifurcated right now? Well, I've been trying to do what people do around this time of year, Morgan, which is to make some lists and figure out, you know, what are the pluses and the minuses, what's nice and not so nice when it comes to the consumer. And again, this gets back to the extent to which you do see positive things happening. The balance sheets are in good shape. Unemployment is low. It may take up a couple of tenths here and there, but still going to be relatively low. You have bigger refunds, tax refunds coming in 2026. And of course, there's this willingness to spend, despite what's on the other side, directly across from it, confidence and sentiment are very low, but you still have this willingness to spend. Same thing. At the same time, one of the things that could be drags next year are the issue of wages and jobs being relatively muted next year. Those are key elements that we're trying to figure out. The student debt repayment is something that could hold back for younger consumers. So some pluses and minuses. But I think at the beginning of the year, certainly some of those forces are going to help propel the economy. Steve, do we have any idea how much this accelerated depreciation in the corporate level may or may not benefit companies and the economy next year? It's a big tax. It's a big tax change. It's huge, Brian. And you really are. It's a real. What do you call a black hole in the forecast? Let me explain why. We know it's there. What we don't know is how many people know about it. And I've also been trying to establish with Treasury, Brian, I don't have an answer yet. You guys can call me if you want. You know, I've been waiting for the answer. The extent to which the rules are out governing how it can be used. And I think, Brian, one of the things that could happen is when this thing comes out and we know what the rules are and people start to realize it's there, they may use it more. Now, they may be using it already because it's retroactive. So we don't know, Brian, it could be a potentially big unknown factor in propelling investment. And I think what's important here, Brian, is propelling investment beyond AI. We know we have the AI investment. These folks are building those data centers like they're going out of style. It's the other stuff that's been a little bit lacking when it comes to investment here. And this depreciation thing could help a lot.

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