Key highlights:

• An acceleration in wage growth, a broadening out of inflation pressures and the ongoing faster than expected fall in the unemployment rate keep the focus on Fed policy.
• We still expect inflation will ease from its current elevated level, but it is set to remain above 2%. This means how, and when, the Fed assesses maximum employment has been achieved will determine the timing of federal funds rate increases.
• We expect to see the first rate hike in Q3 2022 (previously Q1 2023), with risks either side of this depending on how the economy evolves and how the Fed interprets its lift-off criteria.

Find out more in NAB’s US Economic Update – November 2021