Vantage Point

The "One Big Beautiful Bill" (OBBB) supports the 2026 US outlook, but is the optimism for a capex boom premature?

December 11, 2025

Some economists are forecasting a surge in investment driven by the bill's tax incentives (permanent rate cuts, restored expensing). To be sure, expensing does increase the after-tax return on new investments and will support overall growth in 2026. Expectations for the OBBB’s impact on 2026 GDP range from 0.4 to 1.1 percentage points. However, as we look under the hood, the transmission mechanism from tax cuts to organic GDP growth appears clogged, particularly in the current environment. We expect growth to land on the lower end of that range.