JPMorgan Asset Management Sees AI Spending And Wealth Effects Supporting Economic Expansion

JPMorgan Asset Management said an artificial intelligence investment boom and resilient consumer spending were expected to support a continued economic expansion. According to Jin10, the firm said economic momentum was strengthening as companies increased investment in AI infrastructure. It added that a wealth effect driven by rising stock and home prices was supporting spending among higher-income consumers. David Kelly, chief global strategist at JPMorgan Asset Management, said that under the team’s baseline outlook, the economy was expected to strengthen around mid-year. He said income tax refunds and AI-related spending were likely to be important drivers of growth. Kelly said whether growth could continue into the fourth quarter depended on whether Washington introduced additional fiscal stimulus. The team’s baseline view was that Democrats would regain control of the House of Representatives, which it said would limit the likelihood of fiscal stimulus being introduced in 2027. Kelly forecast that if tensions related to the Strait of Hormuz were durably resolved, inflation pressures would gradually ease over the rest of 2026 and next year. He said lower energy costs, cooling housing inflation, and contained wage growth were expected to contribute to slower price increases. He added that the team was not forecasting a recession, and said the wealth effect and the AI boom were expected to continue supporting the economy.