ABA committee predicts economic growth

The U.S. economy will continue to grow for the remainder of this year and into 2027, according to the American Bankers Association’s Economic Advisory Committee..Released March 6, the forecast predicted 2.2 percent real economic growth this year — the same as in 2025, according to the Bureau of Economic Analysis — and 2.1 percent in 2027, which was higher than last September’s survey. Inflation is expected to remain higher than the Federal Reserve’s 2 percent target, partially due to trade policy and the potential impact on oil prices from the war between the United States/Israel and Iran. Brent crude was trading at near $100 a barrel as of March 12, as President Donald Trump declared the United States had won the war and the conflict was in its final stages. Personal consumption expenditures inflation is expected to reach 2.8 percent in the second quarter before falling to 2.1 percent by the end of next year. The Economic Advisory Committee expects the Federal Reserve will approve one 25-basis-point rate cut this year, leaving the federal funds rate between 3.25 percent and 3.5 percent. Unemployment is expected to increase and peak at 4.5 percent in the middle of this year before edging down to 4.3 percent toward the end of 2026. “Labor market uncertainties and persistent price pressures continue to weigh on the outlook, yet the economy is still growing at a measured pace,” said Committee Chair Beth Ann Bovino, chief economist at U.S. Bank. “While the committee sees improvement, we’re still in this low fire, low hire economy,” Bovino added. “Outside of health care, the economy lost jobs in 2025, creating challenges for workers as businesses navigate today’s economic uncertainties.”The Economic Advisory Committee predicted mortgage rates would remain higher than 6 percent until the end of 2027, and projected national home prices to rise 1 percent this year.