US: oil crisis set to cancel out tax cuts

Following the passage of the One Big Beautiful Bill Act last year, Americans will benefit from tax cuts in 2026. The IRS has started to pay tax refunds, which to date are up 11% year-on-year. On a full-year basis, this could boost consumer spending by around 0.5 percentage points, a welcome gift just a few months before the mid-term elections. On the flip side, households are experiencing a sharp rise in gasoline prices. If nothing changes, in three months this item of personal expenditure will have absorbed all the expected benefits of the fiscal stimulus - not to mention other induced effects likely to curb consumption: uncertainty and rising interest rates.