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Social Security’s COLA expected to be lower in 2026, as market turmoil leaves seniors in limbo - MarketWatch

1. 2026 COLA expected below 2025 levels due to subdued inflation. 2. Tariffs may increase inflation, impacting seniors' expenses and stock market volatility. 3. Recent market fluctuations caused a 5% drop in the S&P 500. 4. A potential recession could worsen Social Security's funding issues. 5. Tax cuts for Social Security could hasten insolvency if not compensated.

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FAQ

Why Bearish?

The expected COLA decline may signify weaker consumer spending, leading to slower growth. In the past, such economic signals have caused negative market reactions.

How important is it?

These economic developments directly affect consumer behavior, potentially drumming up volatility in the S&P 500.

Why Short Term?

Immediate market reactions to tariffs and inflation forecasts can influence investor sentiment quickly, as seen in the recent 5% S&P drop.

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