Economic Predictions for 2026

Billionaire investor Leon Cooperman recently discussed the implications of artificial intelligence on market dynamics in the context of geopolitical concerns and uncertainty during a segment on “Craman Countdown.”

Gary Schilling, a well-known market forecaster infamous for his bearish predictions—he was let go from Merrill Lynch for forecasting the 1969-1970 recession—has raised alarms about a potential economic downturn in 2026.

In a recent chat with Business Insider, Schilling expressed that indicators such as a stagnating housing market, poor business investment metrics, and waning consumer confidence point toward a U.S. recession being “almost inevitable” as the year comes to a close.

“Stocks are very pricey, and we’re likely to witness a significant correction soon,” Schilling noted. He added that a drop of 20% or 30% is, historically speaking, not unprecedented. So, yeah, it seems like something that could happen.

“Through my career, I’ve been on the lookout for hidden issues, and while I haven’t spotted anything that screams a major sell-off, that doesn’t mean there aren’t any,” he added.

In the U.S. real estate market, both buyers and sellers appear increasingly hesitant to act, largely due to high interest rates alongside minimal declines in mortgage rates. The landscape also reveals a lack of affordable housing and rising reports of foreclosures, indicating that homeowners are feeling the pinch.

Schilling pointed to what he referred to as a collapse in capital spending—large investments that companies typically see as fundamental for long-term growth. Business Insider highlighted a mere 3.9% growth in capital spending anticipated by the end of 2025, a sharp contrast to the 24% growth noted at the pandemic’s peak.

The stability of U.S. consumers is another critical factor Schilling sees leading towards recession. The Federal Reserve’s preferred inflation measure has held steady at a high level in March, climbing by 0.7% from the month before and up 3.5% year-over-year.

Discussing potential ways to navigate the economic waters, Schilling suggested that either fiscal stimulus or measures to empower consumers could help avert a recession—though he thinks both prospects are rather unlikely.

“It feels as though we’re on shaky ground—revenue is thin and people’s willingness to spend is waning,” he remarked.

Opinions among economists seem to vary regarding the economic landscape for 2026. Alicia Levine, who oversees investment strategy and equities at BNY Wealth, recently stated that strategies for “making money” would help circumvent a recession. In contrast, Cooperman warned FOX Business’s Liz Claman that the nation may indeed be heading for a downturn.

“There are numerous issues at play. The market seems overly inflated,” Cooperman expressed.

Levine responded by suggesting that the market had already begun to weaken before the Iran conflict. Nevertheless, she noted, “Revenues have risen since the start of the year—up by 3%… That’s our observation, and we don’t foresee a recession this year.”