Oxford Economics forecasts that U.S. inflation will slow to 2.4% in 2026, setting the stage for the Federal Reserve to implement two interest rate cuts next year. The U.S. economy is expected to experience robust growth, driven by AI investments, tax incentives, and spending by high-income groups. GDP growth is projected at 2.8% in 2026 and 2.3% in 2027, following a 4.4% annualized increase in the third quarter of 2025. The report highlights rising investments in AI and non-tech sectors, improved productivity, and consumer spending bolstered by stock market gains and tax cuts. Additionally, a decline in immigration and weaker housing demand may further ease inflationary pressures. Despite strong economic fundamentals, the stock market remains highly sensitive.