April 21, 2026
U.S. Quarterly Economic and Market Update: What BACCF Members Should Watch in 2026
For BACCF members, the U.S. macro backdrop matters not only from an investment perspective, but also from an operating and cross-border planning perspective. Slower growth, still-firm inflation, and shifting tariff policy can affect consumer demand, imported input costs, pricing decisions, supply-chain design, and capital allocation. These dynamics are especially relevant for companies and professionals active in the Brazil-Florida-U.S. corridor, where changes in trade costs and policy visibility can influence both near-term margins and medium-term expansion decisions.
The U.S. economy entered 2026 with slower but still positive momentum, as consumer demand and business investment remained supportive while policy uncertainty increased. Real GDP rose at a 1.4% annualized rate in Q4 2025, down from 4.4% in Q3, signaling a meaningful deceleration rather than a broad contraction. Consumer spending and business investment continued to support activity, while government spending and exports declined. Imports also fell, providing a mechanical boost to headline GDP growth.
This quarter’s data also require caution in interpretation. The late-2025 federal shutdown disrupted portions of the data environment, which means some indicators should be read with more care than usual. Inflation progress remained uneven, with January CPI at 2.4% year over year and December PCE still elevated at 2.9%, reinforcing a cautious policy backdrop.
[FIGURE 1 - US Treasury Bonds and Rates (%)]
Source LSEG
Monetary policy. Federal Reserve policy remains a central market variable. The Federal Reserve held the federal funds target range at 3.50% to 3.75% and emphasized data dependence, which means rate expectations will continue to be highly sensitive to incoming inflation and labor-market releases.
Consumer spending. Retail and food services sales totaled $735.0B in December, essentially flat on a month‑over‑month basis and 2.4% higher than a year earlier on a nominal basis. BEA data show that real personal consumption expenditures increased 0.1% in December, suggesting modest real spending growth toward year‑end.
Manufacturing. The sector showed near-term improvement, with industrial production up 0.7% in January and manufacturing output up 0.6%. Even so, capacity utilization remained below its long-run average, suggesting the sector still has slack and remains vulnerable to changes in trade costs and demand conditions.
How tariff changes may affect BACCF members
Tariffs can influence business conditions in several ways.
Prices: Higher import duties can increase the cost of goods, which may eventually translate into higher prices for consumers.
Supply chains: Companies may need to adjust where they source products, change logistics routes, or hold more inventory to manage uncertainty.
Margins: In sectors where customers are sensitive to price increases, companies may not be able to pass higher costs through fully, which can reduce profitability.
Sector exposure: The impact will vary depending on the product category and whether specific goods qualify for tariff exemptions.
Separately, a presidential proclamation introduced a temporary 10% import surcharge under Section 122 authority, effective February 24, 2026, and scheduled to remain in place for 150 days unless extended by Congress. The proclamation outlines a number of exemptions, including selected critical minerals, energy products, pharmaceuticals, specific electronics, vehicles and parts, aerospace products, informational materials, and qualifying goods from Canada and Mexico under USMCA terms.
Trade flows
The broader U.S. goods and services deficit remained elevated, but BACCF readers should also watch bilateral trade with Brazil. U.S. goods trade with Brazil totaled an estimated $94.3 billion in 2025, underscoring the scale of the corridor and the importance of any policy change affecting industrial inputs, consumer goods, and logistics.
Brazil | United States Trade Representative
[FIGURE 2 - US Non-farm payrolls and PMI Index]
Source LSEG
Implications for BACCF members
Asset allocation: The quarter’s mix—slower growth, mixed inflation progress, and tariff uncertainty—argues for balance. A practical stance for general investors is to keep strategic diversification and avoid overreacting to any single data point (especially with late‑2025 data gaps).
Short outlook and key risks for next quarter
Looking into next quarter, the key variables to monitor are inflation persistence, labor-market cooling, and the implementation path of tariff policy. For BACCF members, the practical question is not whether uncertainty exists, but how quickly changing trade and pricing conditions begin to alter planning assumptions in the U.S.-Brazil business corridor.
In addition to the above topics addressed above, the recent escalation of the war in theMiddle East should be carefully monitored, as it could have several economic implications, depending on the duration, intensity and outcome of the conflict.
This report is intended for general business and market information only and should not be interpreted as investment advice. Data reflect publicly available releases and policy announcements available as of the publication cutoff date.
For BACCF members, the U.S. macro backdrop matters not only from an investment perspective, but also from an operating and cross-border planning perspective. Slower growth, still-firm inflation, and shifting tariff policy can affect consumer demand, imported input costs, pricing decisions, supply-chain design, and capital allocation. These dynamics are especially relevant for companies and professionals active in the Brazil-Florida-U.S. corridor, where changes in trade costs and policy visibility can influence both near-term margins and medium-term expansion decisions.
The U.S. economy entered 2026 with slower but still positive momentum, as consumer demand and business investment remained supportive while policy uncertainty increased. Real GDP rose at a 1.4% annualized rate in Q4 2025, down from 4.4% in Q3, signaling a meaningful deceleration rather than a broad contraction. Consumer spending and business investment continued to support activity, while government spending and exports declined. Imports also fell, providing a mechanical boost to headline GDP growth.
This quarter’s data also require caution in interpretation. The late-2025 federal shutdown disrupted portions of the data environment, which means some indicators should be read with more care than usual. Inflation progress remained uneven, with January CPI at 2.4% year over year and December PCE still elevated at 2.9%, reinforcing a cautious policy backdrop.
[FIGURE 1 - US Treasury Bonds and Rates (%)]
Source LSEG
Monetary policy. Federal Reserve policy remains a central market variable. The Federal Reserve held the federal funds target range at 3.50% to 3.75% and emphasized data dependence, which means rate expectations will continue to be highly sensitive to incoming inflation and labor-market releases.
Consumer spending. Retail and food services sales totaled $735.0B in December, essentially flat on a month‑over‑month basis and 2.4% higher than a year earlier on a nominal basis. BEA data show that real personal consumption expenditures increased 0.1% in December, suggesting modest real spending growth toward year‑end.
Manufacturing. The sector showed near-term improvement, with industrial production up 0.7% in January and manufacturing output up 0.6%. Even so, capacity utilization remained below its long-run average, suggesting the sector still has slack and remains vulnerable to changes in trade costs and demand conditions.
How tariff changes may affect BACCF members
Tariffs can influence business conditions in several ways.
Prices: Higher import duties can increase the cost of goods, which may eventually translate into higher prices for consumers.
Supply chains: Companies may need to adjust where they source products, change logistics routes, or hold more inventory to manage uncertainty.
Margins: In sectors where customers are sensitive to price increases, companies may not be able to pass higher costs through fully, which can reduce profitability.
Sector exposure: The impact will vary depending on the product category and whether specific goods qualify for tariff exemptions.
Separately, a presidential proclamation introduced a temporary 10% import surcharge under Section 122 authority, effective February 24, 2026, and scheduled to remain in place for 150 days unless extended by Congress. The proclamation outlines a number of exemptions, including selected critical minerals, energy products, pharmaceuticals, specific electronics, vehicles and parts, aerospace products, informational materials, and qualifying goods from Canada and Mexico under USMCA terms.
Trade flows
The broader U.S. goods and services deficit remained elevated, but BACCF readers should also watch bilateral trade with Brazil. U.S. goods trade with Brazil totaled an estimated $94.3 billion in 2025, underscoring the scale of the corridor and the importance of any policy change affecting industrial inputs, consumer goods, and logistics.
Brazil | United States Trade Representative
[FIGURE 2 - US Non-farm payrolls and PMI Index]
Source LSEG
Implications for BACCF members
Asset allocation: The quarter’s mix—slower growth, mixed inflation progress, and tariff uncertainty—argues for balance. A practical stance for general investors is to keep strategic diversification and avoid overreacting to any single data point (especially with late‑2025 data gaps).
Short outlook and key risks for next quarter
Looking into next quarter, the key variables to monitor are inflation persistence, labor-market cooling, and the implementation path of tariff policy. For BACCF members, the practical question is not whether uncertainty exists, but how quickly changing trade and pricing conditions begin to alter planning assumptions in the U.S.-Brazil business corridor.
In addition to the above topics addressed above, the recent escalation of the war in theMiddle East should be carefully monitored, as it could have several economic implications, depending on the duration, intensity and outcome of the conflict.
This report is intended for general business and market information only and should not be interpreted as investment advice. Data reflect publicly available releases and policy announcements available as of the publication cutoff date.
