A top strategist at JPMorgan Chase says Americans are about to receive a significant financial boost that will fuel more consumer spending.
In a new CNBC interview, the bank’s chief global strategist David Kelly says US taxpayers are estimated to receive a much higher tax refund next year.
Kelly attributes the expected increase to retroactive provisions in the Opportunity and Balanced Budget Act (OBBBA), which reduced 2025 tax liabilities but were not reflected in withholding schedules, leading to over-withholding and larger refunds coming in early 2026.
He believes Americans will use the money to purchase goods and services, boosting consumer spending in the first half of 2026.
“We’re going to get all these income tax refunds. I mean, this year, the average income tax refund was $3,200. Next year, we think it’s going to be about $4,000.
And that’s all going to come in late first quarter, early second quarter. And I think that helps push up consumer spending.”
Kelly says that the 25% year-over-year increase in tax refunds will trigger a temporary spending bump for the economy that will eventually dry up unless something else steps in during the second half of 2026.
“I think the economy will rev up in the first half of next year and then maybe fade again unless we have some further stimulus…
You’ve got this level of consumer spending that you’re now not going to be able to sustain because this is sugar. It’s not protein. People spend it, and it’s gone. And so it’ll be hard to maintain that pace of spending in the second half.”
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