The US economy has shown resilience so far in 2024, despite stubborn inflation and high interest rates. EIU’s June 2024 Global Outlook video features a discussion between head of global forecasting and economics, Tom Rafferty, and global principal economist, Steven Leslie, on the US economic outlook. Despite the Fed’s efforts to cool the economy and reduce inflation, the target for inflation is still too high. EIU expects US GDP growth to grow by 2.2% this year and by 1.8% in 2025.
The Federal Reserve (Fed) will continue to try to cool the economy and reduce inflation, with a target of 2%. However, risks remain as inflation remains stubbornly high. If it continues to be stubborn, there is a chance that the Fed will hold rates throughout the year or even raise them. Unforeseen events such as the covid-19 pandemic or Russia’s invasion of Ukraine could also lead to unexpected outcomes. Steven Leslie, global principal economist at EIU predicts that if inflation remains stubborn, it is possible that the Fed will hold rates throughout the year or even raise them.
In addition to influencing US elections to a lesser extent than traditionally seen, unforeseen events such as natural disasters or political instability could have an impact on US economic growth. The upcoming US elections will also influence economic policy decisions in areas such as tax reform and infrastructure spending. However, non-economic issues such as cultural tensions over immigration are becoming increasingly important factors affecting voting behavior.
The analysis and forecasts featured in this video are available in EIU’s Country Analysis service which provides unmatched global insights covering political and economic outlook for nearly 200 countries enabling organizations to identify potential opportunities and risks
