We think the AI-investment boom is still in its relatively early stages and will eventually drive strong productivity gains as adoption of the technology rises. This keeps us optimistic on the growth outlook, despite White House immigration curbs limiting the economy’s potential. We expect GDP growth to be 2.5% in both 2026 and 2027. Employment growth is underperforming relative to the economy’s strength due to its narrow tech-based focus, but we expect hiring to rebound from next year. With the worst of FOMC members’ fears of a sharply deteriorating labour market avoided, we expect the fed funds target range to bottom out at 3.25%–3.50% next year.