America’s Economy Looks Set to Accelerate

The Economist: “What could be a slurred festive toast is in fact the cheerful forecast of Scott Bessent, America’s treasury secretary, who expects the calendar’s turn to herald faster economic growth. His optimism has foundation. The effects of the One Big Beautiful Bill Act, a tax-cutting law enacted in July, will soon start to be felt. Americans will receive refunds that reflect retroactive tax cuts on income from 2025. They will also find that levies on monthly earnings have fallen…”

“Such tax-cutting should be enough to boost GDP by 0.3%—a reasonable stimulus given the economy probably grew by 1.9% in 2025. And it is just one of several factors that could prove Mr Bessent right. The consensus among economists surveyed by the Federal Reserve Bank of Philadelphia in November was that growth would slow to 1.8% in 2026, as haphazard policymaking and tariffs weighed on the economy. Could their gloom prove misplaced?”

“Thus America might enter 2026 with both the monetary and fiscal cannons firing.”