Apollo: The US economy is entering 2026 with a strong attitude, and AI momentum will withstand the risk of stagflation

The Zhitong Finance App learned that Torsten Slocke, chief economist at Apollo Global Management, said that after a year full of surprises, the US economy is entering the 2026 trading year with a strong attitude.

Sloke pointed out that economic growth in 2025 has repeatedly exceeded expectations, highlighting resilience despite significant headwinds. Trade tensions and tariff uncertainty, stricter immigration rules, and a restart of federal student loan repayments have put pressure on economic activity but have failed to stop its growth.

At the same time, several favorable factors are gaining momentum. Investments related to artificial intelligence (AI) and data center expansion remain strong, the dollar has weakened, and fiscal policies may provide additional support. The Congressional Budget Office (CBO) estimates that the “Big Beautiful Act” may increase gross domestic product (GDP) by nearly 1 percentage point in 2026.

Looking ahead, Slock warned that a short period of stagflation could occur. He added that as additional tariffs come into effect, growth is expected to slow, while the inflation rate remains above the Federal Reserve target (around 3%), which will cause interest rates to remain high for a longer period of time.

Nonetheless, Slocke expects this growth slowdown to be temporary, followed by another AI-driven acceleration. Although the consensus predicts that the probability of a US recession in 2026 is close to 30%, he said that the current overall outlook is still constructive.

“The bottom line is that the US economy will remain strong in 2025, despite intense turbulence,” said Slock. As more signs of improvement appear, we have every reason to be optimistic about the growth momentum going into 2026.”