Full Report

Key arguments

• US growth is resilient but increasingly bifurcated: lower-income households face energy-driven inflation, while higher-income households and corporates benefit from tax policy, deregulation and AI-driven capex.
• The US fiscal trajectory is deteriorating, with deficits structurally near 6% of GDP, debt above US$40tn and net interest costs set to double by 2036; markets are gradually repricing sovereign risk.
• UOB retains a bearish USD baseline (DXY 98.6 in 4Q26 to 95.2 in 3Q27) but flags a September Fed hike as the primary risk that could derail it.
• Gold has likely bottomed near US$4,000/oz on central bank buying and fiscal concerns, but elevated Treasury yields limit the near-term recovery; Brent is raised by US$10/bbl across the forecast horizon.

Corresponding source evidence

1. While the pace of expansion was below expectations at 1.5% q/q SAAR in 2Q, it was still a fifth consecutive quarter of growth anchored by private consumption and business spending, driven overwhelmingly by AI-related investments.
2. We expect the positive growth momentum to continue into 2H this year, albeit at a slower pace although the latest Atlanta Fed GDPNOW is projecting a materially better growth of 4.7% in 3Q (as of 3 Sep). · this year
3. Our more conservative outlook is premised on softer domestic demand as lower‑income households face mounting pressure from elevated energy ‑ induced inflation and spending challenges amidst lingering tariff effects.