There are plenty of reasons to be excited about 2026. I'm looking forward to it and hopeful that economic growth will lock in the Republican majority for the next two years. That’s the key to it all. If Republicans keep the House, we’ll stave off another bogus impeachment or two. If we keep the Senate, Trump can fill more vacancies in the judiciary, and probably get one or two Supreme Court picks. So much is riding on the midterms, and it will all come down to the economy.
So, what can we expect? Despite all the doom and gloom from the Democrats, recent data shows stronger output, cooling inflation, and shrinking trade deficits—everything Trump promised. According to Andrew Moran writing over at the Epoch Times, the overall picture looks good for 2026.
Moran explains that the economic “turbulence” of 2025 is “expected to ease” in 2026. Earlier fears of a downturn or stagflation tied to President Trump's tariffs never materialized; instead, we got improving growth data and more stable price trends.
Remember how Wall Street warned that President Trump’s global tariff plan would trigger a downturn or stagflation? When GDP fell 0.6% in the first quarter of 2025, Trump’s naysayers thought they were right, but then the economy rebounded, with growth jumping to 3.8% in the second quarter and 4.3% in the third. If the Atlanta Fed’s 3% fourth-quarter estimate holds, full-year GDP growth would reach 2.8%, beating the 2.1% consensus forecast.
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Consumer surveys still reflect frustration with high prices thanks to four years of Bidenflation, but under Trump, inflation has stabilized, easing to 2.7% year over year in November. In the first year of Trump’s second term, prices have gone up only about 2%, compared with roughly 6% during Biden’s first year.
Trump’s tariff policies have also narrowed the trade deficit. In September 2025, the U.S. trade gap fell to $52.8 billion, its smallest since June 2020, driven by surging exports and modest import growth.
The unemployment rate did rise to 4.6% in November, the highest since 2021, but that is still historically low. And as Moran points out, even with the government shutdown, uneven economic gains, and tariff pressures, the U.S. economy absorbed headwinds in 2025, and many economists are cautiously optimistic about continued growth in 2026.
"2026 is expected to be a solid year for the economy," said Mark Malek, chief investment officer at Siebert Financial. He cited expected support from fiscal stimulus under the One Big Beautiful Bill Act, continued artificial intelligence capital spending, smaller trade deficits, and Federal Reserve policy.
Treasury Secretary Scott Bessent has framed the outlook as a return to non-inflationary growth that favors working Americans and lower-income households. "We're going to go back to the kind of non-inflationary growth where working Americans do better than supervised workers. Lower-income households do well," Bessent told Fox Business earlier in December. He added that "Main Street, Wall Street can both do well. And my guess is both have a very good year next year."
Democrats started predicting a recession once Trump returned to office, and, obviously, it never materialized. Democrats like to project doom and gloom when a Republican is in office, and they pretend the economy is booming when a Democrat is in the White House. But Trump’s economic policies have defied their partisan predictions time and time again, so I feel pretty darn hopeful that 2026 is going to be a good year.
