No reprieve on the US tariff front

The narrative surrounding policymaking and its near-term economic impact has shifted dramatically from the January to February baseline forecast.

What you will learn:

• US policy is no longer expected to be neutral for the economy in 2025 but will represent a drag due to the accelerated timing of tariffs now reflected in the February baseline.
• We downgraded our GDP forecast this year and next by 0.2ppts and foresee stickier inflation that will keep the Federal Reserve on pause until December.
• Markets, firms, and households did not receive a reprieve from the White House on trade policy announcements. In March, the next likely update to our policy assumptions will be to factor in 25% tariffs on steel and aluminium set to go into effect in the middle of the month.

Snapshot of aluminum imports and duties

For more insights on the 2024 US Presidential Election, click here.