Oxford Economics Forecasts Steady U.S. Growth Driven by AI Investments and Tax Incentives

Oxford Economics anticipates robust growth for the U.S. economy between 2026 and 2027, primarily fueled by investments in artificial intelligence, tax incentives, and spending by high-income groups. According to Jin10, the institution projects a GDP growth rate of 2.8% in 2026 and 2.3% in 2027, following a 4.4% annualized growth rate in the third quarter of 2025. Investments related to AI and non-tech sectors are on the rise, with productivity improvements and stock market gains supporting consumer spending. Inflation is expected to slow to 2.4%, potentially paving the way for two interest rate cuts by the Federal Reserve next year. A decline in immigration and weakened housing demand may further ease inflationary pressures. Overall, the fundamentals of the U.S. economy remain strong, although sensitivity to stock market performance persists.