Legendary economist warns U.S. recession to hit by end of 2026
Finance Legendary economist warns U.S. recession to hit by end of 2026 Veteran economist and former Merrill Lynch strategist Gary Shilling has warned that the United States is likely headed for a recession by the end of 2026. According to Shilling, the possibility of an economic downturn is likely to emanate from weakening economic fundamentals, slowing consumer activity, and elevated stock market valuations, he said in an interview with Shilling argued that only major fiscal stimulus or unexpectedly strong consumer spending could prevent a recession, though he said both outcomes appear unlikely. He pointed to signs of slowing economic momentum, including a stagnant housing market, weaker business investment, and growing financial pressure on households. The economist noted that the housing sector remains largely frozen as high interest rates continue to hurt affordability and demand. Existing home sales briefly improved when mortgage rates eased last year, but activity slowed again as borrowing costs rose. He also highlighted a sharp slowdown in capital expenditures outside artificial intelligence-related spending. Broader private-sector investment grew just 3.9% at the end of last year, down significantly from pandemic-era growth above 24%. Impact of consumer spending Consumer spending, which accounts for roughly two-thirds of U.S. economic activity, has remained relatively stable, with real personal consumption expenditures growing