David Kelly, chief global strategist at JPMorgan Asset Management, relayed on Aug. 25, the Internal Revenue Service has opted not to amend the W2 or 1099 forms for the current calendar year in response to the recently passed One Big Beautiful Bill Act. The law features array of tax cuts backdated to take effect on Jan. 1 of this year even as withholding schedules have remain unchanged.

Accordingly, “we will see an even larger crop of personal income tax refunds in early 2026 than was anticipated when the OBBBA was passed,” Kelly pointed out, estimating that the country’s 104 million taxpayers will see reimbursement of nearly $3,300 on average.“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.”

Equating those givebacks with sugar rather than nourishing protein, Kelly added thus: “when their effects fade, it is quite possible that Washington will provide yet another round of stimulus to boost demand ahead of the mid-term elections. For investors, this underscores the limited potential for a sustained decline in long-term interest rates.”