Goldman Sachs Sees US Economic Momentum Building with Controlled Inflation

Greg Tuorto, Managing Director at Goldman Sachs Asset Management Fundamental Equity, provided constructive commentary on the US economic outlook during a January 22, 2026 appearance on Fox Business Network’s “The Claman Countdown” [1]. His central thesis characterized the current economic moment as a period of accelerating domestic activity, stating, “This is a bubbling up of economic activity with inflation in check” [1]. This observation carries particular significance given that Tuorto represents one of the world’s largest asset management firms, lending institutional credibility to the constructive economic narrative.

The timing of this commentary is noteworthy, occurring during a week of notable market volatility surrounding the presidential inauguration and associated policy uncertainty. Despite this short-term turbulence, Tuorto’s remarks suggest that fundamental economic momentum remains intact and potentially strengthening. His observation that “a lot of people are raising their estimates for GDP” indicates a broader consensus among Wall Street analysts regarding the trajectory of US economic growth [2].

The interview took place against a backdrop of mixed market performance that revealed important sector dynamics [0]. The Russell 2000 index of small-capitalization stocks surged 1.65% for the week, a movement that aligns closely with Tuorto’s constructive domestic growth narrative. Small-cap equities traditionally serve as a barometer for US domestic economic health, as these companies derive the majority of their revenue from domestic sources and are particularly sensitive to changes in underlying economic conditions.

Large-cap indices exhibited more measured performance, with the S&P 500 declining 0.37% to close at 6,913.36 and the NASDAQ falling 1.14% to 23,436.02. The Dow Jones Industrial Average demonstrated relative resilience, gaining 0.37% to reach 49,384.02 [0]. This divergence between small-cap strength and large-cap consolidation suggests active institutional repositioning toward domestically-focused equities, potentially anticipating the improved economic conditions Tuorto described.

Trading volume patterns during this period indicated significant institutional activity, with investors actively adjusting portfolio exposures in response to evolving economic expectations [0]. The small-cap strength, in particular, represents a meaningful data point supporting the thesis of improving domestic economic momentum.

Tuorto’s optimistic characterization aligns with a broader pattern of constructive economic forecasting from major financial institutions. Goldman Sachs’s global outlook anticipates 2.8% global economic growth in 2026, with the United States expected to outperform other developed markets [3]. This projection reflects institutional confidence in continued US economic exceptionalism despite global uncertainties.

BNP Paribas has projected US economic growth averaging 2.9% annually, slightly more aggressive than the Goldman Sachs estimate [4]. The French banking giant’s research notes that inflation will “return to target very gradually,” suggesting a controlled disinflationary environment rather than a deflationary spiral. This gradual moderation in price pressures would support the Federal Reserve’s capacity to maintain accommodative monetary policy through mid-2026.

The US Chamber of Commerce has contributed to this consensus view, projecting at least 2% economic growth for 2026 [5]. While more conservative than investment bank forecasts, this estimate still represents positive economic territory and suggests broad-based confidence in sustained expansion.

Tuorto’s characterization of economic activity as “bubbling up” represents a significant rhetorical choice that merits careful interpretation. Unlike a sudden surge or explosive growth narrative, the “bubbling up” metaphor suggests gradual, building momentum—a coalescence of multiple economic indicators pointing toward acceleration without the volatility typically associated with过热 (overheating). This framing implies that economic growth is becoming increasingly broad-based across sectors while remaining contained enough to avoid triggering inflationary pressures.

The observation that “inflation is in check” carries substantial weight given the Federal Reserve’s two-year battle against persistent price pressures. Should this assessment prove accurate, it would validate the Fed’s “higher for longer” interest rate strategy and suggest that monetary policy is successfully engineering a “soft landing” for the US economy. The implications for asset allocation would be significant: a growth environment with contained inflation typically favors equities over fixed income and favors value sectors over defensive positioning.

The observation that analysts are “raising their estimates for GDP” represents a meaningful shift in institutional sentiment [2]. Consensus GDP forecasts serve as a critical input for corporate earnings guidance, Federal Reserve policy decisions, and institutional asset allocation. When Wall Street analysts collectively upgrade their growth expectations, it typically reflects improving data across multiple economic indicators and signals growing confidence in the sustainability of expansion.

This convergence of analyst opinion contrasts with the heightened policy uncertainty surrounding the new administration. Despite unknowns regarding trade policy, regulatory changes, and fiscal priorities, institutional forecasters appear to be looking through near-term noise toward underlying economic fundamentals. This suggests that the “bubbling up” of activity may be driven by organic private sector dynamics rather than policy-dependent factors.

The 1.65% weekly gain in the Russell 2000 small-cap index provides real-time market validation for Tuorto’s domestic growth thesis [0]. Small-capitalization stocks have historically served as leading indicators for US economic cycles, as these companies respond more quickly to changes in domestic demand conditions than their large-cap multinational counterparts. The small-cap outperformance during the week of Tuorto’s appearance suggests that institutional investors are positioning for improved domestic economic conditions.

This sector rotation also implies potential opportunities in economically sensitive areas of the market. If domestic economic activity is indeed accelerating, companies with significant US revenue exposure—particularly in consumer discretionary, industrials, and materials sectors—may warrant increased attention from portfolio managers seeking to capture the expected momentum.

: Despite the constructive economic narrative, significant policy unknowns could materially affect growth trajectories. Trade policy changes, regulatory shifts, and fiscal policy decisions remain unpredictable variables that could either reinforce or undermine the positive economic momentum [4]. Portfolio managers should maintain flexibility in positioning to respond to rapid policy shifts.

: While Tuorto characterized inflation as “in check,” the BNP Paribas research notes that price pressures will “return to target very gradually” [4]. This suggests that the path to the Federal Reserve’s 2% inflation target remains uneven and could extend longer than markets currently anticipate. Any resurgence in inflation data could force a reassessment of the “inflation in check” thesis and complicate Federal Reserve policy calculations.

: Current market levels may already price in positive economic scenarios to a significant degree. The S&P 500’s valuation at 6,913.36 reflects considerable optimism regarding corporate earnings growth and economic expansion [0]. Investors should be cognizant that market prices already embed expectations for continued growth, potentially limiting upside from incremental positive developments.

: The interview occurred immediately following the presidential inauguration, a period historically characterized by elevated uncertainty regarding policy direction. While markets have shown resilience, the full implications of new administration policies remain to be seen and could rapidly alter sentiment.

: The constructive growth narrative and small-cap strength suggest opportunities in domestically-focused cyclical sectors. Companies with significant US revenue exposure, particularly in consumer discretionary, industrials, and regional banking, may benefit from accelerating domestic activity.

: After a period of underperformance relative to large-cap technology names, small-cap valuations have become increasingly attractive. The Russell 2000’s strength may represent the beginning of a sustained rotation toward domestic small-capitalization equities.

: The Q4 2025 GDP revision, scheduled for release in the coming weeks, will provide critical real-world validation for the “bubbling up” thesis. Stronger-than-expected GDP data could reinforce institutional confidence and support further equity appreciation.

This analysis is based on the Fox Business interview [1] with Greg Tuorto, Managing Director at Goldman Sachs Asset Management Fundamental Equity, published on January 22, 2026. The expert characterized current US economic conditions as a period of building momentum with controlled inflation, noting that analysts are raising GDP growth estimates. This assessment aligns with institutional consensus projecting 2-3% US growth in 2026, with the United States expected to outperform global peers.

Market performance during the interview week revealed meaningful sector dynamics, with small-cap stocks (+1.65%) significantly outperforming large-cap indices [0]. This small-cap strength serves as real-time market validation for the constructive domestic growth narrative. Multiple institutional forecasts from Goldman Sachs, BNP Paribas, and the US Chamber of Commerce support the outlook for continued US economic expansion, though policy uncertainty and gradual inflation normalization represent key risks to monitor [3][4][5].

The analysis incorporates quantitative market data [0] and qualitative institutional research to provide a comprehensive assessment of the economic outlook discussed in the original interview. Investors and portfolio managers should monitor incoming economic data, particularly GDP revisions and inflation metrics, to validate the “bubbling up” thesis and adjust positioning accordingly.