HomeContributorsFundamental AnalysisResearch US - Defying Growing Headwinds

Research US – Defying Growing Headwinds

Economic momentum has picked up lately despite growing headwinds. High imports and inventory drawdowns hid strong underlying domestic growth in consumption and investment.

We raise our 2026 GDP growth forecast slightly to 2.1% from 2.0% and keep our 2027 forecast at 1.8%. Growth slightly exceeded our expectations in first half of 2026. Consumption faces growing headwinds as potential for future real wage sum growth is limited by declining labour supply. Future growth relies increasingly on fixed investment, not least related to AI.

Inflation has fallen a bit more than expected, but we see it broadening. We lower our headline inflation forecast to 3.2% in 2026 (from 3.5%) and to 2.5% in 2027 (from 2.8%). We forecast core inflation at 2.6% in 2026, rising to 2.9% in 2027.

We maintain our call for two Fed rate hikes in December and March. We still see an elevated risk of more persistent inflation pressure and a tighter labour market.

Full report in PDF 

Danske Bank
Danske Bankhttp://www.danskebank.com/danskeresearch
This publication has been prepared by Danske Markets for information purposes only. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. Whilst reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and no liability is accepted for any loss arising from reliance on it. Danske Bank, its affiliates or staff, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. Danske Markets´ research analysts are not permitted to invest in securities under coverage in their research sector. This publication is not intended for private customers in the UK or any person in the US. Danske Markets is a division of Danske Bank A/S, which is regulated by FSA for the conduct of designated investment business in the UK and is a member of the London Stock Exchange. Copyright (©) Danske Bank A/S. All rights reserved. This publication is protected by copyright and may not be reproduced in whole or in part without permission.

Latest Analysis

Learn Forex Trading