Jason Furman on the Fed, Tariffs, and the AI-Fueled Gamble Shaping 2026

In this timely conversation, economist Jason Furman charts the economic terrain after the United States’ “Liberation Day” tariff surge. Furman explains why the worst recession forecasts didn’t materialize: retaliation from allies was muted, some partners cut side deals to soften the blow, and trade reconfiguration simply takes time. Still, he warns the trade “shoe” is still dropping, with an enduring drag that leaves the U.S. roughly 0.5% poorer per year.Looking ahead, Furman argues the biggest near-term risk for businesses is policy incoherence colliding with a split macro picture: strong headline GDP, weak job growth, and muddled inflation. He sees Congress asserting itself — most notably in defense of Federal Reserve independence — while the administration’s legal footing for tariffs faces an imminent test at the Supreme Court. If IEEPA is curtailed, expect administrative chaos, temporary stopgaps reasserting tariffs under other authorities (like Section 122), and — potentially — an offramp for the White House to lift the most unpopular tariffs without admitting error.Globally, allies are doubling down on free-trade compacts with each other, even as they grapple with China’s overcapacity and “China shock 2.0.” Meanwhile, dollar dominance may be reinforced by the U.S.’s embrace of stablecoins. Furman closes with a strategic fork: a positive-sum, growth-first reset (more trade, smarter fiscal choices, tech-led productivity) versus a deepening “techlash” that scapegoats AI, risks slower wage gains, and cedes advantage to China. The stakes for business leaders in 2026 couldn't be higher.What Comes Next with Mira Rapp-Hooper is produced by Rivan Dwiastono, executive produced by Lauren Dueck, with editorial input from Prashant Jha. It contains music by Cody Martin via Soundstripe. What Comes Next is a production of The Asia Group, and is powered by TAG AI, TAG's geopolitical decision engine for businesses.