U.S.: More growth, more inflation and fewer rate cuts – National Bank of Canada
|The latest U.S. data suggest that the economy will end the year on a high note. As has been the case for some time, the current strength reflects solid growth in consumer spending, due not only to the resilience of the labour market, but also to the steady increase in household net worth, NBC’s economist Jocelyn Paquet reports.
GDP set to grow by 1.7% in 2026
“As the drivers of recent performance are likely to remain the same in 2025, the U.S. economy should continue to outperform that of other rich countries, provided the new Trump administration sticks to the most pro-growth part of its agenda and keeps its protectionist instincts to a minimum.”
“While recognizing the high level of uncertainty surrounding these projections, our best guess at this stage is that the spending cuts announced by the Trump administration will be insufficient to prevent tax cuts from widening the deficit further. We therefore expect fiscal policy to have a positive impact on growth over the next two years. On the international trade front, we believe that Washington will refrain from imposing blanket tariffs, opting instead for a more targeted, less disruptive approach.”
“Against this backdrop, we have decided to significantly revise upwards our growth forecast for 2025, to 2.1%. GDP should then grow by 1.7% in 2026.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.