Critics – especially among the economist class – are everywhere, citing volatility. But volatility can be a two-sided coin. Solid reasons suggest the 2026 economy could yet boom, surprising doubters, and putting money back in people’s pockets. Six factors bear closer focus.
First, while interest rates could rise, the argument for low rates is strong. The fast 2025 growth rate slowed, and inflation is low, suggesting no need for higher rates.
While oil prices – which affect everything – are higher with Trump’s attacks on Iran’s nuclear and missile capacity, that should be a temporary spike, and stability created by ending Iran’s terror network, nuclear and missile ambitions is a long-term plus.
Finally, although Trump’s new pick to head the Federal Reserve, Mr. Walsh, was historically focused on inflation, he seems a convert to lower rates. Thus, barring some new shock to the system, which could cut either way – higher rates if inflation, lower rates if growth lags – lower rates seem likely.
Second, growth potential remains high. GDP growth hit 4.4 percent in the 3rd quarter of last year. While it slowed to 1.4 percent in the fourth quarter, and will slow again in the first quarter of this year, the reason is the Democrat shutdowns, most recently of Homeland Security, not only reducing spending and predictability, but also snarling air traffic. This should end shortly.
Adding to growth potential, the Economist reports “private spending and investment continued to expand,” while positive effects of President Trump’s Big Beautiful Bill” – on tax cuts in particular – will likely show up in May and beyond.
Admittedly, some anti-Trump Democrat states, like Maine, will suffer. With an incompetent, leftist governor who forced energy costs up and went to war with the federal government, federal aid to the state has been amputated, and citizens have been forbidden from getting Trump’s “no taxes on tips or overtime.” Like Minnesota, Maine is hammered by Medicaid fraud, but other states will thrive.
Third, the stock market continues to be volatile with the recent war, tariffs, and excitement over new technologies, led by AI. Longer term, AI, datacenters, and energy innovation should drive investment, while tariffs will lighten as agreements continue being crafted, favoring America.
Assuming the Iran war is short, these factors – along with tax cut jumps in consumption, driving up spending, hiring, and investment – should elevate consumer and business confidence. As the fiscal 2026 budget settles, that uncertainty will also likely push restored consumer confidence.
Fourth, as China, Russia, Europe, and other parts of the globe struggle, the US dollar has remained remarkably strong, even elevated. This will draw more capital to the US, further reinforcing the idea that Chinese and Russian attempts to reshape expectations on the dollar were more talk than true.
Fifth, while consumer confidence is presently low – roughly at the 2014 level – the potential for an uptick, if not a surge, remains high if post-war, post-shutdown costs decline and tax cuts drive new spending and job growth.
Sixth, GDP has shot up, then subsided, but this being midterm year, President Trump will have strong incentives – especially with a razor-thin majority in both chambers – to encourage still lower taxes, tariffs, regulations, and interest rates, which would need to register by November.
In truth, leading economic indicators are mixed, unreliable, reflecting incomplete data collection following shutdowns, new variables at play, allied and adversarial reactions to Middle East events, Russia, Ukraine, and this hemisphere, Venezuela, and Cuba. Inflation could spike with rate hikes.
Taken as a whole, President Trump is leading in new, high-growth, high-stability directions. Headwinds, other than debt, are largely political. If these settle, the economy could take off.
Robert Charles is a former Assistant Secretary of State under Colin Powell, former Reagan and Bush 41 White House staffer, Maine attorney, ten-year naval intelligence officer (USNR), and 25-year businessman. He wrote “Narcotics and Terrorism” (2003), “Eagles and Evergreens” (North Country Press, 2018), and “Cherish America: Stories of Courage, Character, and Kindness” (Tower Publishing, 2024). He is the National Spokesman for AMAC. Today, he is running to be Maine’s next Governor (please visit BobbyforMaine.com to learn more)!
President Trump seems to be an army of one, as the rest of congress, democrats and republicans continue to either prevent progress for America by undermining every thing the president wants to do or by secretly opposing everything the president wants to accomplish. I don’t expect the democrats to ever, ever do what’s right, but republicans better step up their game and help the president fight for what’s right or they will be accomplices in destroying this republic. As Benjamin Franklin said , they have given us a republic, if we can keep it. The republicans seem hell bent on letting it slip away. Either they are not the sharpest pencils in the box or they are willingly giving up on the great nation God gave us.
Whenever there are concerns about stock market “volatility” the concerned are simply exposing their investment inexperience. Get used to it. This particular bull market has been fueled by the hopes being realized of a return to freer markets and the ability of businesses to function with fewer restraints, along with the return of the recognition that in the American system, profits are not a sign of one entity taking advantage of another, but of one providing others products and services they want to buy. The big gamble right now is, will those who want to crush the economy and kill prosperity be returned to control of Congress, then, two years after that, to control of the White House?
It took the previous administration four years to basically flip this country upside down. Obviously it’s going to take the rest of the president’s term to get us right side up. Be patient people instant gratification really doesn’t work.
I pray it does…! Even though our SS went up, it doesn’t cover bare necessities – like the increased gas prices, and prices of things like beef, and other good foods that have not come down….