The US and Massachusetts economies will continue to grow during the next several years despite persistent challenges with inflation, rising interest rates and uncertainty over public policy, a prominent economist told AIM yesterday.

Gus Faucher, Chief Economist of PNC Financial Services Group, said resilient consumer spending, technology infrastructure investment and a strong job market have so far counterbalanced the multiple factors weighing down the economy. So, even though he has increased the chances of a recession in the next year to 30 percent, Faucher remains cautiously optimistic.

“We do expect the economy will continue to expand over the next several years,” he told some 200 Massachusetts business executives in a keynote address to the association’s 2026 Economic Outlook event.

Faucher believes the Federal Reserve Board of Governors will increase interest rates two more times before next spring and that those increases will begin to moderate inflation. The Fed, he emphasized, is committed to its benchmark of 2 percent inflation.

“They will achieve that. I’m very sure of that,” he said.

He predicted that job growth in Massachusetts will trail that of the nation as a whole, since the commonwealth is not the “epicenter” of the new wave of technology development surrounding artificial intelligence.

“I think that’s actually a positive for the state. That means state is less exposed when it comes to the inevitable slowing,” Faucher said.

The 2026 Economic Outlook covered a range of issues that have whipsawed the AIM Business Confidence Index for much of the past year. The event featured a conversation with a group of business and government leaders, including Massachusetts Secretary of Housing and Livable Communities, Juana Matias; Thomas Kwan Vice President of the Schneider Electric Research Institute, and A.J Enchill, President & Executive Director of The Berkshire Black Economic Council.

Secretary Matias said the commonwealth is15 percent of the way toward its objective of overseeing the construction of 220,000 new houses, apartments, accessory dwelling units and other places for people to live. She said the Healey Administration’s strategy is threefold – making it easier to build, supporting local leaders on housing issues and investing directly in housing construction through the $5.1 billion housing bond bill passed in 2023.

Enchill told the audience that Berkshire County is building an economic renaissance on the strength of immigrants and other diverse populations who are bringing life to downtown areas in Pittsfield, Great Barrington and other communities. He said that all the issues that Faucher covered at the macro level also apply to businesses on the micro level, especially the need for capital.

“I don’t think a lot of people know how prosperous the Berkshire economy is,” Enchill said.

Kwan said electricity and electrification have become the centerpieces of a “smart infrastructure” that plays to Massachusetts’ traditional strengths of innovation and skilled workers. The only limiting factor to that infrastructure, he said, is not the technology but the ability of the market to absorb the changes.

“Electrification is the new operating system for a modernized economy. What we need to realize that benefit and that growth is, in fact, talent and people development. That is something the commonwealth knows how to do and can do,” Kwan said.