Although progress has stalled in recent months, we still expect core inflation to fall back to within touching distance of the Fed’s 2% target by early next year, aided by favourable base effects. Nonetheless, with the incoming Trump administration intent on imposing import tariffs relatively quickly, the return of core inflation to close to 2% will likely prove short-lived.
The latest edition of this quarterly report captures the US economy at a key moment in its economic and policy cycle, as Donald Trump returns to office on the back of pledges to reshape US trading relations, immigration policy, taxes and the running of government. It addresses key economic and policy issues, including:
- How much of the president's tariff pledges will become policy, and their impact on the US economy;
- What to expect from Trump's immigration and fiscal policies;
- How much further the Federal Reserve can continue cutting rates as Trump begins governing again.
Download a complimentary copy of this report now to understand how the US outlook will fare as rates start falling and November's big vote approaches.
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Report authors
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Paul Ashworth
Chief North America Economist
Paul Ashworth is our Chief North America Economist, with overall responsibility for our coverage of the US and Canada.
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Stephen Brown
Deputy Chief North America Economist
Stephen Brown is our Deputy Chief North America Economist has been with Capital Economics since 2014. He has worked from both our London and Toronto offices, covering the economies of Europe, Canada and the US. In 2021, Stephen was named the most accurate forecaster of the Canadian economy by Refinitiv, FocusEconomics and Consensus Economics. He holds a degree in Economics from the University of Bath and an MSc in Economic History from the London School of Economics.
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