U.S. Macroeconomy and Inflation

Speaking from the World Economic Forum in Davos, Commerce Secretary Howard Lutnick said the $30 trillion U.S. economy will grow at more than a 5% annualized rate in the first quarter of 2026 and reach 6% growth by year’s end, levels not seen outside post‑pandemic rebounds. He argued the surge will be driven by expected Federal Reserve interest‑rate cuts and unusually large tax refunds flowing from the GOP’s "big, beautiful bill" tax-and-spending law, and administration officials noted the Atlanta Fed’s GDPNow tool currently pegs Q4 2025 growth at 5.4%. Outside economists quoted by CBS, including Truist’s Mike Skordeles, say a one‑off 5% quarter is "possible" but maintaining that pace all year is unlikely given trade tensions from Trump’s tariffs and policy uncertainty, and most private forecasts cluster around 2–2.5% growth for 2026. Analysts also warn that juicing demand via lower rates and bigger refunds risks reigniting inflation, which is still running at 2.7% on the CPI with food up 3.1%, recalling how similar forces helped drive the 2022 price spike. Polling cited in the piece shows consumers remain unhappy with prices and want the administration to focus more on cost of living, undercutting the White House’s "roaring economy" narrative even as near‑term GDP readings look strong.