US Economic Weekly Update
Our weekly update of the developments and key themes around the US economy
- President Trump’s reciprocal tariff announcement was more severe than we had expected
- Increased downside risks to growth and a more front-loaded inflation shock is likely to lead the Fed delivering three consecutive cuts from December 2025 through March 2026
- Our overview highlights the key releases of US economic market data
US Economic Weekly Key Insights
- President Trump’s reciprocal tariff announcement was more aggressive than we had expected. We have revised our inflation forecasts higher and our growth estimates lower.
- Rising downside risks to growth and a more front-loaded inflation shock lead us to pull forward our forecast for Fed easing. We now expect three consecutive cuts from December 2025 through March 2026.
- Chair Powell’s speech last Friday was hawkish, emphasizing inflation risks and reiterating that the Fed will remain patient about resuming rate cuts.
- The March employment report showed the labor market remained fundamentally healthy. This is backward-looking data which do not shed much light on the headwinds from tariffs and deteriorating market risk sentiment.
- We expect core CPI inflation moved higher in March, led by strength in core goods prices. Core PCE inflation is likely to be subdued, though, due to weakness in PPI-derived components.
Read our full US Economic Weekly report here.
Contributor
David Seif
Chief Economist for Developed Markets
Aichi Amemiya
Senior US Economist
Jeremy Schwartz
Senior US Economist
Ruchir Sharma
US Economist
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