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TruStage Economic Projections for 2026 - Steve Rick


MADISON, Wis.– Noting it’s “that time a year to make economic projections for 2026,” TruStage’s economists are offering their preview for what they believe lies ahead.

“We expect real GDP to expand 1.5% in 2026, below the 1.8% pace for 2025, and lower than the 2% long run trend growth rate,” wrote the company’s chief economist, Steve Rick, in TruStage’s newest Trends Report. “Growth will be slightly weaker than normal due to tariff policy uncertainty, restrictive monetary policy and slower labor force growth.”

The report states that inflation is expected to be 3% in 2026, only falling slightly from the 3.1% pace this year.

A table displaying the Credit Union Forecast for October 2025, including growth rates, liquidity, asset quality, earnings, and capital adequacy metrics.

“We expect inflation to run above the Federal Reserve’s 2% target as firms pass through any additional tariff costs and the slow growth in labor force will keep upward pressure on wage growth,” the report observes. “This stubbornly high inflation will ensure monetary policy stays restrictive for most of 2026.”

The Trends Report notes that the unemployment rate is expected to rise to 4.5% by the end of 2025 and remain there for all of 2026.

Uncertainty From Tariffs

‘Uncertain tariff policies and restrictive monetary policy will slow the rise in the demand for labor. Meanwhile restrictive immigration policy and deportations will slow the rise in the supply of labor,” the report forecasts. “So, we expect monthly nonfarm payrolls to rise approximately 50,000 per month in 2026, which is the new ‘breakeven’ jobs growth needed to keep the unemployment rate constant.”

TruStage is further expecting the Federal Reserve to lower the Federal Funds interest rate 50 basis points in the fourth quarter of 2025, and another 50 basis points during 2026. 

“This will bring the Federal Funds interest rate close to the 3% neutral interest rate by the end of 2026, which is the rate the Federal Reserve has neither restrictive nor expansionary monetary policy,” according to the report. 

Economic forecast table showing growth rates, inflation, unemployment, and interest rates for 2024, 2025, and 2026.

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