US Economic Update – 18 February 2022

Solid start to Q1 activity data; Fed to start lifting rates in March.

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Key highlights:

  • Strong January retail and auto sales, and a sharp fall in COVID-19 cases, have boosted Q1 GDP growth prospects.
  • Employment growth remains strong and wage growth robust. Inflation readings also remained elevated in January.
  • We now expect the Fed to lift rates by 125bps over 2022 (previously 100bps) with the first increase in March.
  • We also expect the Fed to start reducing the size of its balance sheet (“QT”) in Q3.

 Find out more in NAB’s US Economic update (February 2022)