US Economic Weekly Update
Our weekly update of the developments and key themes around the US economy
- Cyclical sectors likely remained strong.
- We expect only one 25bp cut in 2025 at the March meeting, followed by a long pause due to inflationary shocks from additional tariffs.
- Our overview highlights the key releases of US economic market data
US Economic Weekly Key Insights
- The FOMC delivered a hawkish cut at their December meeting. The dot plot and inflation projections rose more than we expected, suggesting officials are acknowledging last-mile inflation risks and potential upside pressure from an incoming Trump administration. There was one dissent and signs of broader hawkish pushback against the decision to cut.
- Cyclical data have been mixed, with an upside surprise in retail sales offset by weaker business sentiment. ISM manufacturing will be the highlight to start the new year, where we expect a slight downtick to 48.2 from 48.4 for the headline index.
- President-elect Trump has opposed a bipartisan spending deal, raising the risk of a government shutdown. A shutdown would likely be short-lived, and a quiet data calendar in the next few weeks limits the risk of a disruption to scheduled economic releases.
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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