The Economic Outlook Group"in the news"
| I 2025 | II 2025 | III 2025 | IV 2025 | I 2026 | II 2026 | III 2026 | IV 2026 | I 2027 | II 2027 | III 2027 | IV 2027 | I 2028 | II 2028 | III 2028 | IV 2028 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Real Gross Domestic Product (GDP): | ||||||||||||||||
| % | -0.6 | 3.8 | 1.4 | 1.0 | 0.2 | 1.5 | 2.0 | 2.2 | 1.2 | 2.0 | 1.5 | 1.8 | 1.7 | 2.3 | 2.0 | 2.3 |
| Personal Consumption Expenditures: | ||||||||||||||||
| PCE % | 0.6 | 2.5 | 0.9 | 1.2 | 1.7 | 2.3 | 2.5 | 0.9 | 1.6 | 1.7 | 2.1 | 1.3 | 1.9 | 2.0 | 2.2 | 2.7 |
| Inflation, end of period, year-over-year: | ||||||||||||||||
| CPI % | 2.4 | 2.7 | 2.9 | 3.2 | 3.1 | 2.9 | 2.6 | 2.6 | 2.5 | 2.6 | 2.6 | 2.6 | 2.5 | 2.5 | 2.7 | 3.0 |
| Unemployment Rate (end of period): | ||||||||||||||||
| % | 4.2 | 4.1 | 4.5 | 4.7 | 4.8 | 4.8 | 4.5 | 4.5 | 4.5 | 4.3 | 4.3 | 4.2 | 4.3 | 4.4 | 4.4 | 4.4 |
| Non-farm Payrolls, monthly avg. thousand: | ||||||||||||||||
| 111 | 64 | 20 | 35 | 5 | 40 | 60 | 65 | 105 | 110 | 115 | 120 | 125 | 130 | 140 | 145 | |
| Treasury 10-yr Note Yield % (end of period): | ||||||||||||||||
| 4.25 | 4.23 | 4.15 | 3.95 | 3.85 | 4.00 | 4.25 | 4.20 | 4.40 | 4.45 | 4.40 | 4.20 | 4.20 | 4.15 | 4.30 | 4.10 | |
| Federal funds rate % (mid-point, end of period): | ||||||||||||||||
| 4.38 | 4.38 | 4.13 | 3.88 | 3.88 | 3.38 | 2.88 | 2.88 | 2.88 | 2.88 | 2.88 | 2.88 | 2.88 | 2.88 | 2.88 | 2.88 | |
| Country | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| US | 2.6 | 1.6 | 2.2 | 1.8 | 2.3 | 2.7 | 1.8 | 2.5 | 3.0 | 2.6 | -2.2 | 6.1 | 2.5 | 2.9 | 2.8 | 2.1 | 2.4 | 1.8 | 1.6 |
| Eurozone | 1.7 | 1.4 | -0.9 | -0.2 | 1.4 | 2.1 | 1.9 | 2.5 | 1.8 | 1.6 | -6.2 | 5.7 | 3.5 | 0.5 | 0.9 | 0.9 | 1.4 | 1.3 | 1.5 |
| United Kingdom | 1.7 | 0.7 | 0.3 | 1.8 | 2.9 | 2.2 | 1.9 | 1.9 | 1.7 | 1.6 | -10.4 | 8.7 | 4.3 | 0.1 | 1.1 | 0.9 | 1.4 | 1.4 | 1.5 |
| Japan | 4.6 | -0.4 | 1.6 | 1.5 | -0.1 | 1.1 | 0.5 | 1.7 | 0.6 | -0.4 | -4.3 | 2.3 | 1.0 | 1.5 | 0.1 | 1.0 | 1.1 | 0.8 | 1.0 |
| Canada | 3.1 | 3.1 | 1.8 | 2.3 | 2.9 | 0.7 | 1.0 | 3.2 | 2.8 | 1.9 | -5.1 | 5.0 | 3.4 | 1.1 | 1.5 | 0.5 | 1.1 | 2.2 | 2.4 |
| India | 8.4 | 8.6 | 6.7 | 4.9 | 7.4 | 8.0 | 8.1 | 7.2 | 6.4 | 4.0 | -5.9 | 9.2 | 7.2 | 7.7 | 6.4 | 5.9 | 6.1 | 6.0 | 5.8 |
| China | 10.5 | 9.5 | 7.8 | 7.7 | 7.3 | 6.9 | 6.7 | 6.8 | 6.7 | 6.0 | 2.2 | 8.5 | 3.0 | 5.2 | 5.0 | 4.4 | 4.7 | 4.5 | 4.0 |
| Brazil | 7.5 | 2.7 | 0.9 | 2.3 | 0.1 | -3.5 | -3.5 | 1.2 | 1.2 | 1.4 | -3.6 | 5.3 | 3.0 | 2.9 | 3.4 | 2.2 | 1.9 | 2.3 | 2.2 |
| Mexico | 5.2 | 4.0 | 3.9 | 1.4 | 2.3 | 2.7 | 2.7 | 2.4 | 2.2 | -0.3 | -8.8 | 6.1 | 3.9 | 3.2 | 1.5 | -0.2 | 1.6 | 2.2 | 2.4 |
| Australia | 2.8 | 2.6 | 3.6 | 2.4 | 2.6 | 2.5 | 2.4 | 2.4 | 2.7 | 1.8 | -1.1 | 4.7 | 3.7 | 1.5 | 1.3 | 1.3 | 2.1 | 2.2 | 2.3 |
| Russia | 4.0 | 4.3 | 3.4 | 1.3 | 0.6 | -2.8 | -0.2 | 1.6 | 2.8 | 2.2 | -2.7 | 5.6 | -1.2 | 3.6 | 4.1 | 0.9 | 1.4 | 2.2 | 2.1 |
| World | 4.2 | 3.1 | 2.5 | 2.6 | 2.8 | 2.8 | 2.6 | 3.4 | 3.2 | 2.7 | -3.0 | 6.2 | 3.0 | 2.7 | 3.3 | 2.8 | 3.0 | 3.3 | 3.2 |
| End 2008 | End 2009 | End 2010 | End 2011 | End 2012 | End 2013 | End 2014 | End 2015 | End 2016 | End 2017 | End 2018 | End 2019 | End 2020 | End 2021 | End 2022 | End 2023 | End 2024 | End 2025 | End 2026 | End 2027 | End 2028 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| USD/Yen | 91 | 93 | 81 | 77 | 87 | 105 | 119 | 120 | 117 | 113 | 110 | 109 | 104 | 115 | 131 | 141 | 157 | 139 | 135 | 133 | 130 |
| Euro/USD | 1.40 | 1.43 | 1.34 | 1.29 | 1.32 | 1.37 | 1.21 | 1.09 | 1.05 | 1.20 | 1.14 | 1.12 | 1.23 | 1.17 | 1.07 | 1.10 | 1.03 | 1.12 | 1.14 | 1.14 | 1.16 |
| End 2008 | End 2009 | End 2010 | End 2011 | End 2012 | End 2013 | End 2014 | End 2015 | End 2016 | End 2017 | End 2018 | End 2019 | End 2020 | End 2021 | End 2022 | End 2023 | End 2024 | End 2025 | End 2026 | End 2027 | End 2028 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Crude oil per barrel | 46 | 78 | 95 | 107 | 111 | 111 | 58 | 38 | 49 | 67 | 54 | 67 | 52 | 78 | 85 | 77 | 71 | 73 | 74 | 77 | 79 |
| Gasoline | 1.61 | 2.57 | 3.00 | 3.27 | 3.30 | 3.32 | 2.26 | 2.00 | 2.31 | 2.47 | 2.26 | 2.58 | 2.30 | 3.38 | 3.20 | 3.12 | 3.04 | 3.05 | 3.20 | 3.25 | 3.25 |
| PROBABILITY | U.S. |
|---|---|
| HIGH | The risk of stagflation (weaker economic growth, yet higher inflation) has increased and it will squeeze corporate margins in 2H 2025. |
| HIGH | Sources of higher inflation comes from greater import duties (tariffs) and ongoing tensions in the Middle East. |
| HIGH | To protect profit margins, we expect companies will gradually accelerate layoffs, and scale back orders for inventories and CAPEX. |
| Moderate | Record consumer debt + high interest rates + concerns about the economy & employment will curb household spending in 2H 2025. |
| HIGH | Trump to retreat from his tariff & trade policies if he fears it will bring major GOP losses in 2026 midterm elections. |
| Moderate | Trump to nominate this summer a more dovish (and W.H. compliant) Federal Reserve leader once Powell's term ends May 2026. |
| FOREIGN | |
| HIGH | Tensions in the Middle East to remain high as evidence shows Israel and the US failed to destroy Iran's nuclear enrichment facilities. |
| HIGH | We expect Iran will quit the Nuclear Non-proliferation Treaty and move with even greater speed to become a nuclear military power. |
| Moderate | Israel's goal differs from the US: Israel seeks regime change in Iran; the US may focus on "peace" and OK minimal enrichment capability. |
| HIGH | Russia will not alter its attacks on Ukraine even as the West applies more restrictive sanctions. |
| Moderate | China continues to ratchet up tensions over Taiwan. Pressure builds on the US to beef up its military presence in the SCS. |
| HIGH | BRIC nations and other emerging economies take more concrete steps to reduce reliance on the US dollar in world trade. |
| Moderate | China views India its main economic competitor; this may lead to fresh border clashes between two nuclear powers in 2025/2026. |