Key highlights:

• We have lifted our US economic growth expectations for 2025 (up 0.4ppts to 1.0% on a year-ended basis) following the US-China tariff agreement.
• Uncertainty remains, and the US economy is still facing a major increase in tariffs (not only on China but also the rest of the world). Growth of 1.0% is weak and much slower than 2024. Both the unemployment rate and inflation are still expected to increase.
• We still do not expect the tariff shock to lead to persistently higher inflation, but now expect the Fed to start easing in October (previously July).

Find out more in NAB’s US Economic Update (16 May 2025)