US economic outlook: inflation concerns drive uncertainty over Fed interest rate rises

A stabilising energy outlook and fading COVID-19 delta-variant wave are strengthening US economic data, but inflation concerns are adding uncertainty to the monetary policy outlook.

The key takeaways are as follows:

  • We accelerate our expected timeline for the start of Federal funds rate hikes to mid-2022.
  • We raise our 2021 and 2022 CPI inflation forecasts to 4.7% and 5.0% as we expect disruption to delay goods-price normalization.
  • We maintain our 2021 and 2022 real GDP forecasts of 5.5% and 3.7%, as capacity constraints weigh on demand.

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Economic Outlook US economic outlook: inflation concerns drive uncertainty over Fed interest rate rises

SEE ALSO FORMER ECONOMIC OUTLOOKS