TechFlow News, January 5th — According to Jinshi Data, David Rosenberg, who previously worked at Merrill Lynch and has been running his own firm, Rosenberg Research, since 2020, stated that the U.S. economy will face significant challenges in 2026, with the job market likely to contract sharply, thereby weakening the economy and forcing the Federal Reserve to respond with substantial interest rate cuts.
The U.S. unemployment rate has risen from 4% at the beginning of 2025 to 4.6% in November 2025. Rosenberg believes that the unemployment rate will soon exceed 5% and is "likely to approach 6% by the end of the year." Rosenberg stated that the collapse of the labor market and the ensuing recession will force the Federal Reserve to cut interest rates by 125 basis points to 2.25% (equivalent to five 25-basis-point cuts) by the end of the year.
It is worth noting that Rosenberg's views are far from the general consensus among Wall Street economists, who expect the labor market to remain stable in 2026, with the Federal Reserve implementing one or two interest rate cuts. The median forecast among Federal Reserve officials is for one rate cut this year. However, the central bank emphasized that it sees downside risks in the labor market. The Federal Reserve's latest staff projections point out, "Weak labor market conditions and heightened economic uncertainty increase the risk of an economic slowdown exceeding expectations."
