Path Dependent

Northern Trust’s latest macroeconomic update assesses how renewed tariff actions, fiscal constraints, and cautious monetary policy are reshaping U.S. growth and inflation expectations.

Key Insights:

• Growth Downgrade: Real GDP forecast lowered to 1.7% in 2025, reflecting weaker business investment, tariff-driven trade imbalances, and labor market softening.
• Inflation Stubbornness: CPI remains elevated at 3.1%, with a slow path back to the 2% Fed target due to policy and supply-side frictions.
• Monetary Policy: Fed holds rates steady, slows balance sheet runoff, and signals one rate cut in 2025, with additional cuts likely in 2026.

Access the full report for detailed forecasts and strategic implications.