Quarterly Economic Report Q1 2026

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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 data

Between October and December 2025, the labor market continued to soften as indicated by jobs data.

Core PCE decreased to 2.8% year over year in November, but the Fed stated it expects tariff-related pressures to decrease over time.

Line chart visualizing core personal consumption expenditures, or PCE, over time.

Fed rate cuts and healthy corporate balance sheets benefited US high-grade credit and returns were enhanced across bond markets.

Healthcare was the top performer, while technology and AI continued to be solid, heavily influencing index performance.

Horizontal bar chart illustrating US equity sector performance for Q4 202

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More about the authors

Jon Schwartz

Senior Portfolio Manager

Jose Sevilla

Senior Portfolio Manager

Timothy Lee, CFA

Senior Credit Analyst

Ivan Asensio, Ph.D.

Managing Director, Head of FX Risk Advisory

Darrell Leong

Managing Director, Head of Investment Research

Steve Johnson, CFA

Senior Portfolio Manager

Christi Fletcher

Senior Portfolio Manager

Michael Duranceau

Credit Analyst

Edward Lee

Senior Credit Analyst

Emelynn Abreu

Credit Analyst

Travis Dugan

Managing Director, Head of Portfolio Management

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Quarterly Economic Report

Key takeaways

01

The FOMC made a third consecutive cut to the fed funds rate in December 2025.

02

The US labor market softened, and job creation slowed.

03

Q3 GDP grew at an annualized rate of 4.4%.

The data

The average number of jobs fell by 23,000 per month.

Inflation progress has been limited and remains above target.

US Treasury markets rallied in tandem with Fed easing.