Rochester poised to navigate economic experimentation amid policy shifts

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The Rochester region’s economic consistency and legacy of innovation may prove to be a strategic advantage as national policy shifts usher in what investment leaders are calling a period of “economic experimentation.” 

That’s the view of Steve Epping, Rochester regional president at M&T Bank, who said the region is well equipped to navigate the uncertainty ahead — even if it is not immune to broader macroeconomic forces. 

“Rochester is not necessarily immune to possible headwinds or tailwinds in 2026, but it is well positioned to deal with potential changes better than some other similar sized economies,” Epping said, pointing to global and domestic volatility as defining challenges in the year ahead. 

His comments align with a new 2026 capital markets outlook from Wilmington Trust, M&T’s investment arm, which argues that the U.S. economy is entering uncharted territory shaped by simultaneous shifts in trade policy, labor dynamics, technological disruption and rising federal debt. 

In the report, “Economic Experimentation: Trade, Labor, and Debt Under the Microscope,” Wilmington Trust suggests traditional investment playbooks may no longer apply. Instead, investors must interpret real-time conditions and adapt to a rapidly evolving economic landscape. 

“Policy shifts, demographic changes and technological disruption are creating conditions that resemble large-scale economic experiments,” the report notes. “By understanding these experiments, we can identify areas of potential growth and position portfolios to capture value—while managing risk.” 

Tony Roth, chief investment officer of Wilmington Trust Investment Advisors, emphasized that the current environment represents a meaningful break from past cycles, requiring a forward-looking approach grounded in macroeconomic analysis rather than historical precedent. 

Among the most significant forces at play is the resurgence of tariffs at levels not seen since the post-World War II era.  

Intended to reshore supply chains and strengthen national security, these policies could reshape U.S. manufacturing and employment patterns, while also creating opportunities for domestic industrial sectors. 

That shift could benefit Rochester, where advanced manufacturing has long been a cornerstone of the regional economy.  

Epping noted that local manufacturers are particularly well positioned to capitalize, given their track record of adapting to change and embracing innovation. 

He also highlighted the growing role of artificial intelligence in reshaping operations. AI adoption, he said, can help offset labor costs and improve efficiency by automating routine tasks, allowing workers to focus on higher-value activities. 

To remain competitive, Epping advised businesses to streamline processes, adopt new technologies where appropriate and build greater flexibility into their operating models. He also underscored the importance of cybersecurity as digital transformation accelerates. 

“This city has benefited from innovation in manufacturing and other businesses for decades,” he said. “That foundation continues to be a strength.” 

Wilmington Trust’s outlook also points to tightening labor supply as another major “experiment,” driven by demographic trends, evolving immigration policies and increased automation.  

A third key theme is the trajectory of U.S. debt. With federal borrowing projected to rise, the firm frames this as an ongoing macroeconomic test with uncertain limits. Investors, the report suggests, should consider diversification strategies and alternative assets to hedge against potential instability. 

Despite these challenges, Wilmington Trust expects the U.S. economy to recover from a late-2025 slowdown and return to a long-term growth trend of roughly 2% annually. 

Consumer behavior is likely to remain divided, with higher-income households continuing to spend while lower-income consumers face persistent financial pressure. 

For investors, flexibility, disciplined diversification and a forward-looking perspective will be key to navigating what comes next, according to the forecast. 

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