Quarterly Economic Report
Q1 2026
Key Takeaways
The SVB Asset Management Economic Report is a quarterly review and outlook on economic and market factors that impact global markets and business health.
01 The FOMC made a third consecutive cut to the fed funds rate in December 2025.
Further rate actions in 2026 will be informed by a wide range of incoming data to ensure balance.
02 The US labor market softened, and job creation slowed.
The softening in the labor market supported the rate cut by the Fed at the December FOMC meeting.
03 Q3 GDP grew at an annualized rate of 4.4%.
Moderate Q4 growth is expected due to the government shutdown which impacted economic data and consumer spending.
The average number of jobs fell by 23,000 per month.
Between October and December 2025, the labor market continued to soften as indicated by jobs data.
Inflation progress has been limited and remains above target.
Core PCE decreased to 2.8% YoY in November, but the Fed stated it expects tariff-related pressures to decrease over time.
US Treasury markets rallied in tandem with Fed easing.
Fed rate cuts and healthy corporate balance sheets benefited US high-grade credit and returns were enhanced across bond markets.
The S&P 500 ended 2025 with strong returns.
Healthcare was the top performer, while technology and AI continued to be solid, heavily influencing index performance.
Written and researched by SVB dedicated professionals.
