Key highlights:

• The combination of stronger recent data and the likely direction of policy changes under Trump means we now expect the FOMC to cut rates more slowly.
• We still see a cut in December, but a pause is possible. For 2025, we now expect 100bps of rate cuts (previously 150bp). This reflects the changes to our growth and inflation forecasts as well as an expectation that upside inflation risks will weigh in Fed thinking.
• US policy settings will change under a Trump Presidency. We have pencilled in some working assumptions around how much, and when, elements of the Trump agenda will be implemented, but policy uncertainty is likely to remain elevated for a while to come.
• We have lowered our GDP, and increased our core inflation, forecasts primarily reflecting a large increase in tariffs which we pencil in to start in mid-2025.

Find out more in NAB’s US Economic Update (15 November 2024)