Bankers Association Issued Economic Forecast

The committee projects persistent inflation and interest rate hikes through the end of 2026.

Updated on Sept. 23, 2026 in Economic Indicators

Isometric editorial illustration of a stack of steel I-beams on a concrete floor, representing industrial infrastructure investment. — The American Bankers Association Economic Advisory Committee projects persistent inflation and interest rate increases through late 2026, despite projected business investment growth. AI Illustration. Upload story photo >

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The American Bankers Association Economic Advisory Committee released a forecast projecting real GDP growth of 2.2% for 2027. The committee also anticipates a federal funds rate hike in the fourth quarter of 2026.

Why it matters

Higher services inflation and elevated oil prices are keeping inflation above the Federal Reserve 2% target. Meanwhile, the housing market remains constrained by high prices and a mortgage lock-in effect.

Real GDP is projected to grow 2.7% in Q3 2026 before cooling to 2.2% in 2027. Core PCE inflation is expected to reach 3.3% by the end of 2026.

The players

American Bankers Association

This is the primary trade association for the United States banking industry.

Federal Reserve

This is the central banking system of the United States tasked with managing monetary policy.

The details

Business investment is expected to grow by 6.7% in the second half of 2026, largely supported by spending on data centers and technology equipment. Labor market stability is forecasted through a combination of productivity growth and slower labor-force expansion.

Q3 2026: Real GDP growth is projected to reach 2.7%.
Q4 2026: A federal funds rate hike is expected alongside 3.3% core PCE inflation.
2027: Real GDP growth is projected at 2.2% with core inflation at 2.4%.

Manufacturing
Sept. 18
United States Manufacturing Output Fell in August
Economic Indicators
Sept. 23
U.S. Corporate Optimism Has Declined
Inflation
Sept. 21
Chicago Fed President Cited Demand in Inflation Fight

Macro View

The current economic outlook contrasts with historical cycles by maintaining elevated inflation above the Federal Reserve 2% inflation target. This trajectory suggests a departure from past periods where price stability was more easily aligned with moderate GDP growth.

Consumers may face continued high borrowing costs as the committee anticipates further interest rate hikes. Elevated inflation and home prices continue to limit housing affordability for the average household.

The takeaway

The projected growth in business investment suggests that technology and data infrastructure will remain key drivers of economic activity. Readers should plan their personal finances with the expectation that interest rates will likely remain higher for longer.