A tax-refund surge is coming. How JPMorgan expects it to shift economy and markets.

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RegExp("[?&]notifications=1(&|#|$)");"desktop"===y&&i&&b.test(window.location.search)&&(i.checked=!0)};be("ybar-mod-notification",(function(e){var t={isUH3:"crunch"===e.getConfig().ytheme,notifContainer:document.getElementById("notification-container"),notifBadge:document.getElementById("notif-badge"),notifMenu:document.getElementById("ybarNotificationMenu"),notifMenuOpener:document.querySelector("#ybarNotificationMenu + label"),notifDropdown:document.getElementById("notifDropdownContainer"),tooltipContainer:document.querySelector(".".concat(Vn)),notifLabel:document.querySelector(".".concat($n))};t.notifDropdown&&ro(e,t)}))}()}};]]>Barbara KollmeyerTue, Aug 26, 2025, 4:11 PM 6 min readA rush of tax refunds is likely in early 2026, says JPMorgan. - Getty ImagesSeptember is around the corner and with that, a Fed meeting that is all-but-assured — judging by market expectations — to deliver an interest-rate cut.Our call of the day from JPMorgan Asset Management’s chief global strategist David Kelly says a potential rush of U.S. tax refunds coming early in 2026 could present one argument for the Fed to delay.I am a 65-year old single woman with 25 credit cards. How do I cancel them without hurting my credit score?We’re in our 70s and have $1.4 million. We pay $1,750 in rent. Will we run out of money in retirement?Forget about Fed rate cuts for a second — and worry about how markets are running so low on extra cashKelly explains that earlier this month, the Internal Revenue Service announced withholding levels will remain the same for the current calendar year, to allow time for implementing the One Big Beautiful Bill Act (OBBBA). It will instead provide guidance and new forms for the 2026 year.“This seemingly innocuous statement confirms we will see an even larger crop of personal income tax refunds early in 2026 than was anticipated when the OBBBA was passed. These higher income tax refunds should work much like a new round of stimulus checks, adding to consumer demand and inflation pressures early next year,” Kelly told clients in a note on Monday.His chart shows the refund surge eclipsing anything seen in recent history:- JPMorgan Asset ManagementKelly points to seven big individual OBBBA provisions that retroactively took effect on Jan. 1 — no income tax on tips, overtime or auto loan interest, a bonus deduction for those 65 and over, an increase in state and local tax deduction (SALT) deductions and permanent increases in standard deductions and child tax credits.As the IRS isn’t changing the withholding schedules, taxpayers will likely recoup those tax breaks in bigger refunds or lower payments when they file 2025 taxes next year, he said.Read: Investors don’t get many new wins in the tax bill. How to make the best of it anyway.JPMorgan estimates the IRS could process 110 million refunds for an average $3,743 payment in the current calendar year, assuming two-thirds of retroactive tax breaks are paid via refunds and one-third via lower annual payments.The difference from the pandemic-era stimulus is that overall, upper-middle-income householders will get more those refunds than lower-middle-income and lower-income households, with the bulk of benefits focused on households in the 50% and 90% income percentiles. As richer households tend to save more than poorer ones, the consumer- spending boost may be less than seen from pandemic stimulus. That also means less spent on consumer basics and a bit more for discretionary spending, Kelly said.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,481.40 +15.46 (+0.24%)Dow 3045,565.23 +147.16 (+0.32%)Nasdaq21,590.14 +45.87 (+0.21%)Russell 20002,373.80 +15.20 (+0.64%)VIX14.85 +0.23 (+1.57%)Gold3,451.80 +18.80 (+0.55%)PortfolioSign in to access your portfolioSign inTop gainersMDB MongoDB, Inc. 295.70 +81.36 (+37.96%)SATS EchoStar Corporation 58.76 +7.89 (+15.51%)NCNO nCino, Inc. 32.69 +4.00 (+13.94%)LUMN Lumen Technologies, Inc. 5.27 +0.58 (+12.37%)PCT PureCycle Technologies, Inc. 14.86 +1.26 (+9.26%)Top losersTIGR UP Fintech Holding Limited 11.57 -1.25 (-9.75%)NEGG Newegg Commerce, Inc. 60.89 -6.14 (-9.16%)LI Li Auto Inc. 22.60 -2.05 (-8.32%)KNF Knife River Corporation 82.76 -7.39 (-8.20%)SMMT Summit Therapeutics Inc. 24.81 -2.17 (-8.06%)Most activeWBA Walgreens Boots Alliance, Inc. 11.98 +0.06 (+0.50%)OPEN Opendoor Technologies Inc. 4.0200 -0.6800 (-14.47%)NVDA NVIDIA Corporation 181.60 -0.17 (-0.09%)PSNYW Polestar Automotive Holding UK PLC 0.4700 +0.3100 (+193.75%)NIO NIO Inc. 6.34 -0.36 (-5.37%)Earnings eventsMy earnings eventsEarnings eventsTrending tickersNVDA NVIDIA Corporation 181.60 -0.17 (-0.09%)CRWD CrowdStrike Holdings, Inc. 422.61 +5.01 (+1.20%)SNOW Snowflake Inc. 200.39 +6.04 (+3.11%)HPQ HP Inc. 27.11 +0.10 (+0.37%)LUMN Lumen Technologies, Inc. 5.27 +0.58 (+12.37%)Top economic events