TD Securities economists Oscar Munoz and Eli Nir anticipate that US output growth will remain flat throughout 2026. This outlook is driven by ongoing disruptions from the Oil shock and persistent geopolitical risks related to Iran, according to FX Street.
These challenges are expected to keep the Federal Reserve on hold with interest rate adjustments through the end of the year, signaling a cautious approach amid uncertain economic conditions.
For Japanese investors, this forecast highlights the potential for sustained volatility in US markets, which could influence FX and equity flows given the close trade and financial linkages between the US and Japan.