Morgan Stanley Raises US GDP Forecast to 2.6% as Inflation Cools Amidst Resilient Growth

On February 14, 2026, Morgan Stanley revised its 2026 US GDP growth forecast upward to 2.6%, citing stronger capital expenditure assumptions, particularly stable business investment linked to spending growth by major cloud computing firms. The same day, the Bureau of Labor Statistics reported that the Consumer Price Index cooled more than expected in January, with headline CPI rising 2.4% year-over-year, below the 2.5% forecast, and core CPI increasing 2.5% as anticipated.

Lower energy prices and used car costs drove the cooldown, though some service prices continued to rise. Despite the positive inflation data, market expectations for Federal Reserve rate cuts remained cautious. CME data suggested markets broadly anticipate the first rate cut of the year potentially in June. However, Morgan Stanley also warned in its report that the biggest risk to the US economy is no longer trade protectionism but a potential bubble in the artificial intelligence sector.