We continue our long-standing partnership with the Journal of Business to bring you the 27th Annual Economic Forecast with a theme highlighting “National Forces, Local Reality” from a panel offering local, regional, and national insights.
According to the Efficient Market Hypothesis (EMH) pioneered by economist Eugene F. Fama, financial markets fully reflect all available information. In practice, that assumption is being tested today.
The prolonged U.S. government shutdown has disrupted the release of key economic data such as GDP, inflation, employment, and consumer spending, forcing investors and policymakers to make decisions with blurred economic data. Meanwhile, AI-related equities are soaring, fueling debate over whether markets are efficiently pricing innovation or inadvertently creating an asset bubble.
I desperately wanted to use my favorite economic phrase this year for this space, which is "cautiously optimistic." But the majority of the economists I asked to contribute to this supplement have convinced me of my potential naiveté.
Uncertainty certainly has been the watchword this year, as shock-and-awe style actions at the federal level, coupled with stubborn inflation and interest-rate levels and continued unrest elsewhere in the world, left businesses here only guessing about what is next. As a result, it has felt a bit like we are all on hold.
