The economy continues to do well with GDP growing strongly and employment growth solid. We are concerned, however, that the Trump administration’s policies will weigh on GDP growth over the course of this year. Nonetheless, with downward progress on core inflation stalled and tariffs likely to keep it close to, or above, 3% for much of this year, we expect the Fed to remain on the sidelines for at least the next 12 months, leaving the fed funds target range at between 4.25% and 4.50%.
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