The Iran war has stalled the world's economic momentum this year, likely pushing growth lower compared to 2025, the International Monetary Fund warned Tuesday. The IMF downgraded its forecast for global growth to 3.1% in 2026 from the 3.3% it had forecast back in January. The expected growth would mark a deceleration from a 3.4% expansion in 2025. Citing higher energy prices caused by the war, the IMF marked up its expectation for global inflation this year to 4.4% from 4.1% in 2025 and from the 3.8% it had forecast for this year in January.
By CHARLOTTE KRAMON, ALEX VEIGA and MARY CLARE JALONICK Associated Press
In a rare bipartisan effort for a deeply divided Congress, the Senate has passed a broad bill to make U.S. housing more accessible and affordable. The bill passed on Thursday would reduce regulations, regulate corporate investors and expand how housing dollars can be used to build affordable homes and rentals. It now heads back to the House, which passed a separate version earlier this year. It is unclear whether President Donald Trump would sign it after declaring last weekend that he won't sign any new measures unless Congress passes legislation that would require voters to show proof of citizenship.
Shoppers unexpectedly paused their spending in December from November, closing out the holiday shopping season and the year on a lackluster tone. The report, issued by the Commerce Department on Tuesday, surprised economists who were looking for growth despite mounting concerns about a slowing job growth, uncertainty about President Donald Trump's tariffs and other economic headwinds. And it raised questions about shoppers' ability to spend after they have remained resilient for months despite souring consumer confidence, economists said.
U.S. job openings fell to the lowest level in more than five years, another sign that the American labor market remains sluggish. The Labor Department reported Thursday that vacancies fell to 6.5 million in December — from 6.9 million in November and the lowest since September 2020. Layoffs rose slightly. The number of people quitting their jobs — which shows confidence in their prospects — was basically unchanged at 3.2 million.
By CHRISTOPHER RUGABER and PAUL WISEMAN AP Economics Writers
The turmoil shaking global financial markets reflects a sudden fear that the Federal Reserve may have held its key interest rate too high for too long, heightening the risk of a U.S. recession.Economists and Wall Street traders now expect the Fed to cut its benchmark rate, which influences borrowing costs for consumers and businesses, much faster than they thought just a week ago. Chair Jerome Powell has said that the Fed could quickly lower rates if it decides that it's needed to bolster the economy. Yet fear of a recession has become a hallmark of the post-pandemic economy — and has been wrong every time. Instead, contrary to what most analysts have predicted, steady economic growth and a solid pace of hiring have so far persisted.
