Key highlights:

• April activity data have been mixed, but still point to very strong growth in Q2 GDP.
• There was a major upside surprise to inflation in April. While this largely reflects some temporary factors that should wane over coming months, how long current elevated price pressures persist is a major uncertainty.
• We still expect tapering of asset purchases to begin in Q1 2022, with the Fed signalling this towards the end of this year.
• We also expect the fed funds rate to remain unchanged through to end 2023, but note that this call is line ball, with a risk of rate hikes in 2023.

 Find out more in NAB’s US Economic update May 2021