Growing Opportunities and Growing Risks
Article from MHI Solutions Magazine
THE U.S. ECONOMY is facing two conflicting dynamics with a rare coexistence of momentum and uncertainty. Gross domestic product (GDP) growth has been much better than many expected, and the U.S. labor market remains relatively tight. Meanwhile, U.S. inflationary pressures have eased meaningfully, although year-on‑year rates remain above the Fed’s 2% target. At the same time, however, geopolitical risks and trade uncertainty loom large, shaping a business environment where opportunity and risk are expanding in parallel.
Growth is Strong and Broadly Supported
Economic growth has been resilient. U.S. GDP expanded at a robust 4.4% annualized pace in the Q3 2025 revised report, underscoring the economy’s capacity to grow even after a historic tightening cycle typified by rapidly rising interest rates and a shrinking Fed balance sheet. Plus, the growth outlook remains constructive not just for the U.S., but globally, according to the latest International Monetary Fund World Economic Outlook from January 2026. Lower interest rates across economies, as well as increased defense spending among the U.S. and its military allies in Europe and Asia, are also supportive of growth and the global economy. A solid growth outlook is crucial for globally exposed sectors, supply chains and capital investment decisions, as synchronized growth tends to reinforce demand across regions…
