The Latest News and the Economic Outlook

U.S. growth still looks resilient, but it is likely to be slower and more uneven than in recent years. Consumer spending should keep rising modestly, supported by equities and steady services demand, though weaker refunds, higher fuel costs, and soft sentiment are clear headwinds.

The labor market remains a low-hire, low-fire environment with limited wage pressure, which helps contain inflation from wages. Inflation is still set to stay elevated near term because of energy prices and geopolitical risk in the Middle East, but it should ease later as tariff effects fade and housing inflation cools.

Capital spending remains a key bright spot, especially in AI infrastructure and energy-related investment. Earnings growth also appears healthy enough to support U.S. equities, while the Fed is likely to stay patient for now rather than cut quickly.

For investors, the backdrop favors staying invested but selective. U.S. assets still look constructive on fundamentals, yet international markets may benefit from cheaper valuations and a softer dollar if Fed policy diverges from other central banks.