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

Key Insights:

The realist case for capex in 2026:

• The Pull-Forward Effect: Some of the capital benefit is retrospective. The bill rewards capex already deployed in early 2025, strengthening balance sheets without necessarily incentivizing new projects for 2026. While the bill could pull some 2027 spend forward, this will likely be marginal—driven by tax optimization rather than a fundamental need for capacity. History suggests these policy measures often pay companies for activity they were planning anyway, rather than adding to the total capital stock.
• Policy Uncertainty: Even with signed legislation, the "rules of the road" regarding tariffs remain volatile. Companies generally don't greenlight multi-year projects when input costs and regulatory frameworks are in flux, unless positive demand signals are overwhelming.
• The AI Capex Reality Check: AI was the primary source of capex growth in 2025. The sector is now transitioning from the "FOMO" phase to the "ROI" phase. As scrutiny on returns tightens—and physical power constraints hit data center build-outs—AI-related capex growth is poised to decelerate, adding less to GDP than in previous years.
• Debt Overhang: As others have noted, the OBBB adds to the debt-to-GDP ratio, creating potential fiscal drag over the medium to long term.