Svmuu News Federal Reserve The semi-annual report indicates that U.S. economic activity will continue to expand steadily overall in 2026, driven primarily by high-tech investment and government spending. Factory output will grow strongly due to investment in AI-related data centers, and production capacity will continue to increase.However, the housing market stagnated, and external economic growth was hampered by the conflict in the Middle East and tariffs. The labor market remained generally stable, with both wages and productivity rising; however, a slowdown in immigration led to a decline in the labor supply, and small businesses and households continued to face tight credit conditions.
Inflation remains elevated and is expected to rise further in the spring, while asset prices are above historical norms.The financial system is generally sound, with banks holding ample reserves; the private credit market continues to function normally despite some redemption pressure. Long-term inflation expectations are largely anchored around the 2% target, but uncertainty stemming from the war in Iran remains a major risk. (Jin Shi)