• Bank of America projects 2.4% U.S. GDP growth in 2026, driven by five key economic tailwinds
  • Inflation is expected to remain stubbornly above target with headline PCE at 2.6% and core at 2.8%
  • The labor market is forecast to cool gradually, with unemployment easing to 4.3%

Bank of America economists are projecting a stronger-than-consensus 2.4% growth rate for the U.S. economy in 2026, citing what they describe as "five powerful tailwinds" that should sustain momentum even as inflation proves persistent.

The forecast, detailed in a recent research note to clients, comes as markets assess the delayed effects of Federal Reserve policy shifts and ongoing structural changes in the economy. "We see 2026 as a year where multiple catalysts converge," said a senior economist familiar with the analysis, who asked not to be identified discussing internal projections.

At the core of BofA's optimistic outlook is the OBBBA stimulus package, which the bank estimates will add 0.3-0.4 percentage points to GDP through direct consumer support and business investment incentives. The massive federal program, passed with bipartisan support earlier this year, represents what analysts describe as "meaningful fiscal support at a crucial juncture."

The lagged effects of the Federal Reserve's rate-cutting cycle are expected to provide another significant boost, particularly in the second half of 2026. "Monetary policy operates with long and variable lags, and we're just beginning to see the full impact of easier financial conditions," the economist noted.

Trade policy represents a third pillar of support, with BofA anticipating a more growth-friendly environment regardless of specific tariff rulings. Recent administrative actions and congressional discussions suggest a shift toward reducing trade barriers rather than escalating them, according to people familiar with the bank's analysis.

Artificial intelligence investment continues to drive what one portfolio manager called "a fundamental restructuring of productivity dynamics." Corporate capital expenditure in AI infrastructure and implementation shows no signs of slowing, with technology firms and traditional industries alike allocating substantial resources to digital transformation.

Finally, mechanical "base effects" from prior government shutdowns are expected to provide an arithmetic lift to GDP calculations. The temporary disruptions in late 2024 and early 2025 created depressed comparison periods that will make 2026 growth appear stronger on a year-over-year basis.

Not all aspects of the 2026 outlook are uniformly positive. Inflation remains a concern, with BofA projecting headline PCE at 2.6% and core at 2.8%—both above the Fed's 2% target. The labor market is expected to cool only gradually, with unemployment declining to 4.3% as hiring moderates but avoids significant deterioration.

Bank of America officials declined to comment on the record about the specific forecasts, though multiple sources confirmed the broad outlines of the analysis. Attempts to reach other major banks for comparative forecasts were not immediately successful.

The bank's constructive view stands in contrast to some more cautious Wall Street projections that emphasize recession risks and fiscal uncertainty. Still, BofA's track record in economic forecasting has earned it attention among institutional investors who are positioning portfolios for the medium-term outlook.

Correction: An earlier version of this article misstated the expected unemployment rate for 2026. It is projected to be 4.3%, not 4.2%.