Investing.com -- The tax cuts in the One Big Beautiful Bill are providing a modest economic tailwind but fall short of the broad-based stimulus boom that was touted, according to Wolfe Research analyst Tobin Marcus.

In a note published Tuesday, Marcus said his January projections have largely played out as expected.

"DC policy will be a tailwind for growth in 2026, but the economic picture will remain mixed," he wrote, adding that overlapping sources of stimulus "may not be individually transformative, but they add up. So we think the economy will be just fine... but we also don't expect the bona fide economic boom that the Administration has been talking up."

On the individual side, tax refunds are tracking close to Wolfe's earlier projection of $111 billion, with refunds up $47 billion year-over-year.

However, Marcus cautioned that much of the benefit has accrued to higher-income households less likely to spend it immediately, meaning peak impact on consumption has likely already passed. The residual cash, he argued, will instead serve as a buffer against potential shocks, such as a prolonged rise in energy prices stemming from the U.S.-Iran crisis.

On the corporate side, Wolfe noted that business tax incentives, including full expensing for equipment and R&D, are unlikely to generate an economy-wide capital expenditure boom, noting that AI-related investment is already capacity-constrained while non-AI companies continue to face policy uncertainty.

The market implication, Marcus said, is that AI will remain the dominant market theme, with leadership staying narrow as the broader economy "trundles along."