Key highlights:

• GDP still looks set for a rebound in Q2 2022, but beyond that the outlook has weakened.
• We have revised down our GDP forecasts to allow for the fall-out from lockdowns in China and a greater than expected tightening in financial conditions (falling equity prices and dollar appreciation).
• We have brought forward our expected timing of fed fund rate hikes – we now expect the Fed to hike by 50bp not only in June but also in July.
• We expect the Fed will move more slowly towards the end of the year; as a result, our forecast of the peak fed funds rate (2.50-2.75% in Q1 2023) is unchanged.

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