According to the semi-annual report released by the Federal Reserve (Fed) on the 10th (local time), the U.S. economy in 2026 is maintaining a generally robust expansion driven by high-tech investment and government spending, with manufacturing production strongly increasing and production capacity continuously expanding due to AI-related data center investments. However, the housing market has stalled, and the external economy has shown sluggish growth due to Middle East conflicts and tariff impacts. The labor market is generally stable, with wages and productivity rising together, but labor supply has decreased due to slower immigration, and small businesses and households still face tight financing conditions. Inflation remained high and rose further in the spring, and asset prices are above historical averages. The financial system is generally sound with ample bank reserves, and the private lending market is operating normally despite some redemption pressures. Long-term inflation expectations are anchored near the 2% target, but uncertainty surrounding the Iran war was still identified as the biggest risk.
